At its latest meeting, the Reserve Bank Board announced it was lowering the cash rate from 3.85 per cent to 3.60 per cent.
Please click here to view the Statement by the Monetary Policy Board: Monetary Policy Decision.
With the official rate change, we’re watching closely what the banks do with their rates, as some of Australia’s biggest lenders may make changes to their rates.
You will be notified directly by your bank if and when they change their interest rate.
Please get in touch if you would like to discuss recent rate movements or if you would like to review your finance options.
Stay up to date with what’s happened in the Australian economy and markets over the past month.
Interest rates and tariffs continue to influence markets globally.
After the RBA’s surprise move to leave rates on hold at its July meeting, soft inflation data has paved the way for a future rate cut.
The ASX 200 climbed to a fresh record high during the month of July. Wall Street also recorded all-time highs as tariffs begin to be locked in and AI investment takes off.
Click the video below to view our update.
Please get in touch if you’d like assistance with your personal financial situation.
With a new financial year underway, now’s the time for small business employers to check they’re across the latest changes to super obligations – from Superannuation Guarantee (SG) increases to updated balance contribution caps.
Here’s a brief roundup of the super changes you need to be aware of from 1 July 2025.
SG rate rises to 12% – what it means for you
A key change small business employers need to be aware of is the increase in the SG rate to 12 per cent.
This means you need to contribute a minimum of 12 per cent of your employees’ ordinary time earnings to their chosen super account. (Obviously, if your eligible employees have a higher percentage listed in an award or employment agreement, you need to pay this higher amount).i
You should ensure all super and payroll calculations reflect the increased rate.
Employees making voluntary contributions or salary-sacrificing should be encouraged to review their super arrangements to avoid exceeding their annual contributions caps.
Make sure no employee is missed
Now is a good time to check you are paying SG for all eligible employees. Before 1 July 2022 you didn’t have to pay SG for workers earning less than $450 a month. But you now have to pay super, regardless of how much they earn.
Generally, all employees must be paid super, despite their employment status. This includes full-time, part-time and casual workers, temporary residents such as backpackers, company directors and family members.
If an employee is under 18 years, SG must still be paid when they work more than 30 hours in a week.
Reduced SG base for high-income employees
The higher SG rate also affects the indexed maximum super contribution base used to determine the maximum quarterly limit for a high-income employee’s earnings base.
From 1 July 2025, the quarterly maximum super contribution base is $62,500, which means the maximum SG payment amount per quarter is $7,500. The new limit is a decrease from the 2024-25 quarterly limit of $65,070.
As an employer, you are not required to pay SG on the part of your employee’s earnings above this quarterly limit, so review your payroll settings to ensure they reflect the reduced cap.
Annual contributions caps remain stable
While knowing these super changes is important, it’s also essential to know what is not changing on 1 July 2025.
The annual concessional contributions cap remains at $30,000, while the non-concessional contributions cap stays at $120,000. This means the three-year bring-forward cap also remains at $360,000 (The bring-forward rule allows those who are eligible to pay up to three years of after-tax super contributions in one year).ii
While you’re not responsible for tracking employees’ contribution caps, it’s important to understand them because they may affect staff making voluntary contributions or salary sacrifice arrangements.
Suggest that employees track all contributions entering their account and consider adjusting their super arrangements if they are nearing their annual cap.
Balance caps increase
The other key changes to be aware of is the increase in the general transfer balance cap (TBC) from $1.9 million to $2 million from 1 July 2025. The TBC is the limit on the total amount of super that can be transferred to the retirement phase.
The total super balance cap (TSB), which includes all of an employee’s super and retirement phase accounts, is also increasing to $2 million. This cap is used to determine eligibility for non-concessional contribution and bring-forward arrangement amounts, carry-forward concessional contributions, spouse tax offsets and government co-contributions.
The cap increases do not directly affect employers, but they may influence an employee’s decision on making additional super contributions or moving into retirement.
If you would like more information about the new super obligations for 2025-26, contact our office today.
There are always lots of tax-related tasks to complete every EOFY, but as we move into the upcoming financial year, it is also worth getting to grips with new tax changes the Government’s election promises will usher in on 1 July, which we’ve outlined below.
New 2025-2026 tax changes
During the election campaign, the Labor government announced a number of tax changes.
These include the introduction of a standard $1,000 deduction for work-related expenses for taxpayers with labour income, a 20 per cent reduction in HECS-HELPS debts, and an extension of the $20,000 instant asset write-off until 30 June 2026.
Legislation has already been passed to cut the tax rate for individuals and is effective from 1 July 2026. The rate for income between $18,201 and $45,000 will be reduced from 16 per cent to 15 per cent, with a further reduction to 14 per cent in the following financial year.i
The government has also made it clear it intends to proceed with its draft legislation (Division 296) reducing the tax concessions for super accounts with a balance exceeding $3 million. This legislation will double the tax rate on earnings related to the portion of the balance over $3 million from 15 per cent to 30 per cent.
Now, let’s look at a few ways you can get prepared in the lead up to 30 June.
Start your tax preparations now
The ATO has announced its tax time hitlist, so it’s also important to check your current tax arrangements are not going to leave you vulnerable to an audit or significant penalties. The main focus for the ATO this year is work-related expense claims, investment properties and holiday home claims, and sharing economy income and cryptocurrency.i
With the ATO taking a much tougher stance on both tax reporting and payments, make sure you lodge and pay on time, or you could face penalties and interest charges. From 1 July 2025, interest paid to the ATO will no longer be tax-deductible.
Tips for businesses
Review and update all of your financial records and identify expenses that could be deductible.
You may want to make some deductible purchases prior to EOFY to help reduce your taxable income for the financial year. The small business instant asset write-off limit for 2024-25 is $20,000.ii
Also check your debtors, inventory and fixed assets, and ensure you write-off any debts that are not recoverable. Review any capital gains and losses and consider offsetting the gains with capital losses.
Check all required super contributions for employees have been made, plus any additional contributions for business owners. Ensure these contributions are received by the funds specified cut-off date to qualify for any tax deduction.iii
To-do list for personal tax
Getting your personal tax information prepared is also important, particularly given the ATO’s focus on personal deduction claims.
If you have regular deductible expenses (such as interest on investment loans and annual payments), consider prepaying them before 30 June so you can claim a deduction this financial year.
If you are likely to have personal capital gains tax obligations from the sale of assets, consider whether you should try to offset them against capital losses.
Time for some super contributions
Consider making extra personal super contributions before the financial year ends if you can.
Before making any contributions, check the total amount of both your concessional (before-tax) and non-concessional (after-tax) contributions across all your super accounts to ensure you do not exceed the annual cap limits.iv
Other super contributions to consider include personal tax-deductible contributions, contributions on behalf of your spouse and eligible contributions that could earn you a co-contribution from the government.v
If you would like to discuss EOFY preparations for either your personal tax or business, please call our office today.
The Australian Tax Office will be cracking down on work-related expenses in personal tax returns this year after recently revealing some of the claims that have been submitted in the past.
The ATO is also reminding businesses of this year’s limit for the popular instant asset write-off and its ongoing focus on GST fraud.
Here’s a roundup of the latest tax news.
‘Wild’ deduction claims
The tax office caused some raised eyebrows with its revelations about ‘wild’ work-related expense claims made by some taxpayers, including a mechanic claiming an air fryer, TV, gaming console and microwave.i
Other claims deemed to be personal rather than work-related included a truck driver claiming swimwear so he could go for a swim when stopped for a break, and a fashion industry manager claiming over $10,000 in luxury-branded clothing that was purchased to wear to work functions.
This time the ATO says it intends to focus on common taxpayer errors, such as work-related expenses, working from home deductions, and income from multiple sources (including side hustles like ride sourcing services or selling services via an app).
Instant asset write-off limit
The ATO is reminding taxpayers who purchased business assets during the financial year that the instant asset write-off limit in 2024-25 is $20,000.ii
The instant write-off (which allows you to immediately deduct the business part of the cost of eligible assets) is available to businesses with an aggregate annual turnover of less than $10 million who use the simplified depreciation rules.iii
The full cost of eligible depreciating assets (both new and second-hand) costing less than $20,000 on a per asset basis, may qualify for the deduction.
Focus on business GST fraud continues
A Melbourne man has been sentenced to 2 years and 11 months’ imprisonment after obtaining over $390,000 in fraudulent GST refunds and attempting to obtain a further $330,000.
The sentence reflects the continued ATO focus on stamping out GST fraud, with the acting deputy commissioner Kath Anderson noting there were “no ifs, ands or buts here – if you don’t run a business, you don’t need an ABN and you cannot claim GST refunds”.
The ATO-led Serious Financial Crime Taskforce remains on the lookout for potentially fraudulent GST activities, with information sharing identifying businesses using complex financial arrangements (such as false invoicing, misaligned GST accounting methods and claims for fake purchases) to obtain larger GST refunds.
New small business benchmarks released
Small business owners keen to take the ‘pulse’ of their business can now use updated financial benchmarks covering 100 different industries produced by the ATO.
Updated annually, the benchmarks are designed to help business owners compare their performance against other businesses in the same industry.
Owners can use the information to identify if their performance is within the normal range for their industry, which mean it is less likely to attract ATO attention.iv
Paperless SMSF reporting
The ATO has emailed trustees of SMSFs still completing and lodging paper activity statements encouraging them to move to paperless reporting for improved security and convenience.
The regulator says benefits of paperless reporting include an additional two weeks on the fund’s lodgment deadline, reduced errors, faster refunds and easier recordkeeping.
In line with the push for greater digital SMSF reporting, the ATO recently noted non-lodgment of SMSF annual returns remains a concern and this can result in trustee penalties and removal of a fund’s compliance status.v
Estimates of illegal early access in SMSFs is also worrying the regulator, with prohibited loans from funds increasing.
Help with compromised TFNs
With identity theft continuing to increase, the ATO has updated its information for taxpayers who find their tax file number (TFN) has been compromised.
TFNs can be comprised through a number of different channels like email or phishing scams, or through data breaches at legitimate organisations as well as ID theft by criminals.
Anyone who believes their TFN has been compromised or used illegally should contact the ATO immediately on 1800 467 033.
Pandemic-era leniency is a thing of the past and the regulator is warning small and medium enterprises (SMEs) it is keeping an eye on them.
Information is now published quarterly on the ATO’s SME focus areas webpage. The focus areas currently include – deductions and concessions, personal use of business income, operating outside the system and poor reporting habits.i
Business not personal income
Incorrect use of business money and assets is a perennial issue for the ATO, but it is reporting an increased use of business money and assets for personal purposes.
The ATO says the main area where SMEs are making errors relates to the integrity rules in Division 7A of the Income Tax Assessment Act. These rules apply when a private company attempts to provide money or other benefits to its shareholders or their associates tax-free.
According to the ATO, common errors in this area are caused by shareholders (both owners and associates) failing to understand the company is a separate legal entity and its money and assets do not belong to them and cannot be used for private purposes.
Failing to meet Division 7A requirements when making, repaying or managing loans to shareholders and associates is also attracting the ATO’s attention.
A private company making these types of loans must meet a number of requirements, including – entering into a complying loan agreement, charging interest at the benchmark interest rate, declaring the interest in the shareholders’ assessable income, and making repayments by 30 June (see Case Study).ii
Incorrect deductions and concessions
The ATO has also turned the spotlight onto those who incorrectly claim and offset business losses against other income sources.
Some taxpayers are claiming losses from a business activity (as either a sole trader or an individual in a partnership) where the activity is not related to their primary source of income.
Non-commercial business losses (NCL) cannot be offset against assessable income earnt from other activities in the year in which the losses are made.iii
Operating outside the tax system
Although taxi, limousine and ride-sourcing services have been on the ATO’s hitlist for some time, there is a continuing focus on businesses operating outside the tax system.
Operators in this area must register for GST regardless of their annual turnover and ensure they collect and pay GST and income tax on all rides and other business income.
The ATO is using a range of data sources to check that all drivers register for a Tax File Number (TFN), Australian Business Number (ABN) and the Goods and Services Tax (GST).
Drivers choosing not to register or comply with GST and income tax obligations may find the ATO itself registers them for GST and backdates their registration.
Contractor income and TPRS
The ATO is also checking on contractors who incorrectly report or omit contractor income.iv
The taxable payments reporting system (TPRS) now covers building and construction, courier, cleaning, IT, road freight and security services. These businesses must now lodge a taxable payments annual report covering contractor payments.v
Building good habits
The final area of current focus is changing small business GST reporting from quarterly to monthly.
From March 2025, those with a history of failing to comply with their reporting obligations will receive written communications from the ATO notifying them their reporting cycle has changed to monthly.
Targets of this action will be businesses who failed to respond to previous ATO communications and who have demonstrated a poor compliance history (such as paying late or the incorrect amount, failing to lodge or lodging late, and reporting their tax obligations incorrectly).
The shorter monthly reporting cycle change is designed to embed good business habits into the targeted business by better aligning reporting with their reconciliation process. According to the ATO, some SMEs have voluntarily moved to monthly GST reporting to improve cash flow management and keep their recordkeeping accurate.vi
Please give us a call if you are concerned about any of these issues so that we can help you decide on the best course of action.
RGM are proud to announce that financial advisory firm Money Talk Planners will be joining forces with RGM come the 1st of July 2025.
Money Talk Planners is a locally, family-owned financial planning business based out of Morwell that has been in operation for over 30 years. It has a reputation of providing high quality advice to its clients in a professional manner; values that underpin the services we provide at RGM. With the move, the entire Money Talk Planners team will reside in our Traralgon office.
There will be no change to the existing service provided to all our financial planning and accounting clients. Joe Auciello, Partner of over ten years in both our accounting and financial planning divisions, explains why RGM sought out this alliance. “In the ever-growing financial advisory sector, it is imperative that as a business, we look at strategic moves to ensure we can bolster our service offering to existing and new clientele. The Money Talk Planners team will bring their own ideas across to RGM that we look forward to incorporating into our business. Over the past two years we have been diligently working in the background to ensure that this move puts RGM at the forefront of financial planning in Gippsland both now and into the future”.
As part of the move, MTP practice principal Tony Salvatore and financial advisor Adrian Salvatore will join the ownership group of RGM. With over 30 years of financial of financial planning experience, Tony is excited about the move. “Both businesses have shared values, and we will be able to offer enhanced resources, greater financial guidance and invest quality time with our clients. It will be business as usual.”
We formally welcome the Money Talk Planning team across to RGM and we’re all excited in what the future holds!
In the shadow of an upcoming election, Jim Chalmers’ fourth Budget delivered small but unexpected tax cuts for all Australian taxpayers.
The modest cuts were delivered against a backdrop of growing economic uncertainty, with the treasurer emphasising the need for national resilience in the face of rapid global change.
Tax cuts for everyone
In a surprise revelation, the treasurer announced two new tax cuts in the 2025 Budget.
The first is a cut in the lowest personal income tax rate, which covers every dollar of a taxpayer’s income between $18,201 and $45,000. The current 16 per cent rate will reduce to 15 per cent in 2026-27 and be lowered again to 14 per cent from 1 July 2027.
According to the government, the reduction will take the first tax rate down to its lowest level in more than half a century. Combined with the 2024 tax cuts, an average earner will be paying $2,190 less in 2027-28 compared with 2023-24.
The second tax cut is an increase of 4.7 per cent to the Medicare low-income threshold for singles and families. This means the Medicare Levy will not kick in until singles earn $27,222, rather than the current $26,000 level. The threshold for families will rise from $43,846 to $45,907, while single seniors and pensioners will have their threshold increase from $41,089 to $43,020.
Energy relief for small business and households
The Budget also provided small businesses and households with a welcome additional energy bill rebate to cope with the burden of high energy costs.
Around one million eligible small businesses will receive an additional $150 directly off their energy bills from 1 July 2025. This will extend the government’s energy bill relief until the end of 2025, as the previous rebate scheme was due to end on 30 June.
Abolition of non-compete clauses and licensing reform
Some businesses may be less pleased with the Budget announcement of a planned ban on non-compete clauses covering low- and middle-income employees leaving for another business or to start their own.
Competition law will be tightened to prevent businesses making arrangements that cap workers’ pay and conditions without their knowledge or agreement, or that block them from being hired by competitors. The government claims this will increase affected employees’ wages by up to 4 per cent as they will be able to move to more productive, higher-paying jobs.
Work will also begin on a national occupational licence for electrical trades, which is intended to provide a template for other industries where employees are currently restricted from working across state and territory borders.
Beer excise freeze
Government support for the hospitality sector and alcohol producers was also announced in the Budget.
Indexation of the draught beer excise and excise equivalent customs duty rates will be paused in a measure costing about $165 million over five years.
Strengthening competition law
Small business will benefit from the government’s decision to work with the states and territories to extending unfair trading practices protections to small businesses.
Over $7 million will be provided over two years to strengthen the Australian Competition and Consumer Commission’s enforcement of the Franchising Code.
Subject to consultation, protections from unfair contract terms and unfair trading practices will be extended to all businesses regulated by the Franchising Code.
Supporting Australian businesses
Local companies will also benefit from $20 million in additional support for the Buy Australian Campaign, which encourages consumers to buy Australian-made products.
The Budget further supported local businesses with $16 million in funding for a new Australia-India Trade and Investment Accelerator Fund.
Additional ATO tax compliance funding
The ATO will be happy, with the 2025 Budget providing $999 million over the next four years to extend and expand its tax compliance activities.
This includes additional funding for the shadow economy and personal income tax compliance programs, together with $50 million from 1 July 2026 to ensure the timely payment of tax and unpaid super liabilities by businesses and wealthy groups.
