Monetary Policy Decision – Statement by Philip Lowe, RBA Governor, October 2020

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Monetary Policy Decision – Statement by Philip Lowe, RBA Governor, October 2020

At its meeting today, the Board decided to maintain the current policy settings, including the targets for the cash rate, the yield on 3-year Australian Government bonds, and the parameters for the expanded Term Funding Facility.

The global economy is gradually recovering after a severe contraction due to the pandemic. However, the recovery is uneven and its continuation is dependent on containment of the virus. While infection rates have declined in some countries, they have increased in others. The recovery is most advanced in China, where conditions have improved substantially over recent months. Globally, inflation remains very low and below central bank targets.

Financial conditions remain accommodative around the world and supportive of the economic recovery. Financial market volatility is low and the prices of many assets have risen substantially despite the high level of uncertainty about the economic outlook. Bond yields are at historically low levels, as are interest rates for most businesses and households. The Australian dollar remains just a little below its peak of the past couple of years.

The Australian economy experienced a sharp contraction in the June quarter, with output falling by 7 per cent. As difficult as this was, the decline in output was smaller than in most other countries and smaller than was earlier expected. A recovery is now under way in most of Australia, although the second-wave outbreak in Victoria has resulted in a further contraction in output there. The national recovery is likely to be bumpy and uneven and it will be some time before the level of output returns to its end 2019 level.

Labour market conditions have improved somewhat over the past few months and the unemployment rate is likely to peak at a lower rate than earlier expected. Even so, unemployment and underemployment are likely to remain high for an extended period. Wage and inflation pressures remain very subdued. The Bank will publish a full set of updated forecasts next month.

Over the past six months, the Australian economy has been supported by a substantial easing of fiscal policy. Public sector balance sheets in Australia are in good shape, which allows for continued support, with the Australian Government budget to be announced this evening. Both fiscal and monetary support will be required for some time given the outlook for the economy and the prospect of high unemployment.

The Bank's policy package is working as expected and is underpinning very low borrowing costs and the supply of credit to households and businesses. There is a very high level of liquidity in the Australian financial system and borrowing costs are at record lows. $81 billion of low-cost funding for authorised deposit-taking institutions (ADIs) has been advanced under the initial allowance of the Term Funding Facility. ADIs currently have access to a further $120 billion under this facility. As this is drawn down, there will be a further very significant expansion of the Reserve Bank's balance sheet.

Government bond markets are functioning well, alongside a significant increase in issuance. Bond yields are around record lows. Early in September, the Bank bought a further $2 billion of Australian Government Securities (AGS) in support of its 3-year yield target, bringing total purchases of government securities since March to $63 billion. Over the past couple of weeks, 3-year yields have fallen to around 18 basis points as markets price in some probability of further monetary policy easing.

The Board is committed to do what it can to support jobs, incomes and businesses in Australia. Its actions, including last month's decision to expand the Term Funding Facility, are keeping funding costs low and assisting with the supply of credit. The Board views addressing the high rate of unemployment as an important national priority. It will maintain highly accommodative policy settings as long as is required and will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3 per cent target band. The Board continues to consider how additional monetary easing could support jobs as the economy opens up further.

Source: Reserve Bank of Australia, October 6th, 2020

Enquiries

Media and Communications
Secretary's Department
Reserve Bank of Australia
SYDNEY

Phone: +61 2 9551 9720
Email: rbainfo@rba.gov.au

Source: MLC Economic Monthly update

Has your business made a tax loss this year?

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Has your business made a tax loss this year?

This has been a difficult year, and your business may have made a tax loss.

A tax loss is when the total deductions you can claim, excluding gifts and donations, are greater than your total income for an income year.

If your business makes a tax loss, you may be able to:

  • offset the loss in the same income year against other assessable income, or

  • carry forward the loss and claim it as a business deduction in a later year.

If you’re a sole trader or in a partnership and want to offset a tax loss, first check if you meet at least one of the non-commercial losses requirements.

If you do meet the requirements, then you can offset the loss against other assessable income (such as salary or investment income) in the same income year.

If you don’t meet the requirements, you can defer the loss or carry it forward to future years. For example, you can offset it when you next make a profit.

If your business is a company, you can generally choose the year you want to claim a deduction.

Remember, registered tax agents can help you with your tax.

https://publish.viostream.com/player/iframe/bi9or7onhipf3p

 

Source : ATO Small business newsroom August 2020 

Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/Newsroom/smallbusiness/General/Has-your-business-made-a-tax-loss-this-year-/

Important: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person. 

 

Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Source: MLC General article newsletter

Estate planning and investments

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Estate planning and investments

It's a question most of us ask eventually: what happens to our investments when we die?

The answer often depends on the type of asset you own and the structure through which you own it.

Generally, when you die an executor that you nominate in your will takes control of your assets and has responsibility for distributing them in accordance with your wishes. The executor will normally apply for a court order declaring your will is valid. This court order is called probate.

If you die without a will, or if your executor is unable or unwilling to act, the court will normally appoint an administrator to the estate. The administrator has similar powers to an executor.

Then, they will deal with your assets in accordance with your will, or in accordance with the rules of your state if you didn't leave a will.

Let's look at what happens to your investments one by one:

Real estate

An interest in real estate held in your name alone forms part of your estate and is passed on or sold in accordance with your wishes as set out in your will.

This not necessarily true when you own real estate with someone else.

Jointly owned real estate can be held in one of two ways—as 'joint tenants' or 'tenants in common'. If a tenant in common dies, their interest in the real estate is an asset of their deceased estate and can be passed on to beneficiaries as dictated by their will.1 If they are joint tenants, however, their interest passes directly to the other joint tenant and does not form part of the estate.

Shares and managed funds

Directly-owned shares and units in managed funds that are in your name only form part of your estate and will be passed on in accordance with your will by your executor. The executor can sell shares and distribute the proceeds or distribute the shares directly.

But jointly owned shares come under similar rules to real estate. Where shares are held as 'joint tenants'—which is common in many brokerage accounts—the other owner automatically takes full ownership.

Bank account

If you have a joint bank account, the money will also transfer directly to the other joint holder.2 Otherwise, bank accounts are closed and the money paid to the executor or administrator, who then distributes the money to your beneficiaries.

Personal assets

Your personal property like cars, furniture, clothing, artwork and other goods form part of your estate.3 Most personal property will be distributed according to your will. Property that requires registration, like cars and boats, will need to be formally transferred by the executor.

Family trusts

Assets held in a family trust do not form part of your estate. Assets held in a trust are owned by the trust, which continues to operate after your death.4 The trust determines who gets the assets regardless of what your will says.

Private companies

Similar to family trusts, any assets owned by your private company do not form part of your estate when you die because those assets are owned by the company, not by you personally. This is true even if you are the only shareholder in the company.

The shares that you own in the company do form part of your estate and can be passed on.

Private companies can be complicated if you are the only director and don't leave a will appointing an executor who can appoint a director to the company after you are gone. In that case, a relative would have to apply to the Supreme Court for letters of administration to manage the estate which can take months5, during which time the company may be unable to trade.

Superannuation

Your superannuation is also not part of your estate as it is held in trust to fund your retirement. Your super is passed to your beneficiaries in very specific ways, usually through a Binding Death Benefit Nomination or a reversionary pension.

The benefit of considering what type of assets will need to be dealt with when you are no longer around may not seem like a big deal but it can make it much easier for those set to receive things you want them to have and for those charged with distributing your assets. So it is well worth while giving the matters covered in our three part series on estate planning serious consideration. 

Please contact us on |PHONE| if you seek further discussion on this topic.

  1. https://www.ato.gov.au

  2. https://moneysmart.gov.au/losing-your-partner

  3. https://www.lawaccess.nsw.gov.au

  4. https://moneysmart.gov.au/wills-and-powers-of-attorney

  5. https://asic.gov.au

Written by Robin Bowerman, Head of Corporate Affairs at Vanguard.

Source : Vanguard July 2020 

Reproduced with permission of Vanguard Investments Australia Ltd

Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer. We have not taken yours and your clients' circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our PDS or Prospectus online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.

© 2020 Vanguard Investments Australia Ltd. All rights reserved.

Important: Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Source: MLC General article newsletter

Are super contributions tax deductible?

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Are super contributions tax deductible?

Ever woken up on your birthday and found a horribly-wrapped present at the end of your bed? Plain paper, bulky sticky tape, badly written card? But then you open the present and it’s what you’ve been dreaming of for years?

The same could be said for super. It’s messy, complicated, tricky to get into. But worth it in the end. 

Why? Because the three layers of tax benefits—when you contribute, while your money’s invested and when you take it out—could make it supremely effective at giving you a long, worry-free retirement.
 

Tax-deductible super contributions

One particular tax benefit is tax-deductible contributions to super.

Personal super contributions—those made from money you’ve already paid tax on such as savings or your take-home pay—are tax deductible. These contributions can be claimed against your assessable income when you lodge your tax return.

Bottom line? You get to save some tax whilst bringing you closer to your retirement goals.

Here’s how it works.
 

Case study example

Joana works in IT earning $90,000 a year. She decides to make an additional personal contribution of $13,000 into super. Here’s the first complication – she pays tax on that contribution at 15% ($1,950) so she is left with $11,050 to invest for her retirement.

When completing her tax return, Joana claims a tax deduction for the $13,000 personal super contribution. This reduces her taxable income to $77,000 for the financial year.

As her marginal tax rate is 34.5% (including the 2% Medicare levy), she pays $4,485 less in tax than she would have had she not made the super contribution. In total, she saves $2,535 on tax (we’ve deducted the $1,950 paid in contributions tax).


 

The rules on personal tax-deductible super contributions

There are rules surrounding tax in super that you should be aware of.

  • Personal contributions are concessional contributions  so, they’re capped at $25,000 per financial year1. If you choose to contribute over this amount, you may be required to pay more tax.

  • Your personal super contribution is taxed at 15%2 which is significantly lower than what most people pay on their taxable income (the highest marginal tax rate is 47% if you include the Medicare Levy).

  • Higher income earners (on more than $250,000) are taxed at 30%3 on contributions. That’s a decent extra tax hit—but still a lot less than the top marginal tax rate.

  • If you’re a lower income earner on a marginal tax rate of 15% or close to it, there may be little advantage in making a tax-deductible super contribution. Speaking to a financial adviser can help you decide the best approach. You can contact us on |PHONE|.

  • If you’re 67 or over you need to meet a work test before you can make a personal super contribution. This means you must have been employed during the financial year for at least 40 hours over a period of no more than 30 consecutive days. 

Claiming your tax deduction

To claim a tax deduction, you’ll need to provide your super fund with a ‘Notice of intent to claim or vary a deduction for personal super contributions’ form. This form is available through your super fund or the Australia Taxation Office.

Once your super fund receives your form, they’ll be able to confirm the amount you’re eligible to claim as a tax deduction.

Bottom line: Super is harder than it probably should be—but better than you probably think. The mix of a whole range of tax savings, structured long-term investing and regular contributions make it a powerful engine for delivering an anxiety-free retirement.

There are a whole range of strategies—like personal tax-deductible super contributions—that make it worthwhile putting a little extra effort (and money) into your super.  Please contact us on |PHONE| .Talking to us we can make it a lot easier.

1 ATO: Concessional contributions cap – 22 July 2020 https://www.ato.gov.au/Rates/Key-superannuation-rates-and-thresholds/?page=3
2 ATO: Tax on contributions – 28 November 2018 https://www.ato.gov.au/Individuals/Super/Growing-your-super/Adding-to-your-super/Tax-on-contributions
3 ATO: Tax on contributions – 28 November 2018 https://www.ato.gov.au/Individuals/Super/Growing-your-super/Adding-to-your-super/Tax-on-contributions

Source : MLC Insights August 2020 

National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. MLC Limited uses the MLC brand under licence. MLC Limited is a part of the Nippon Life Insurance Group and not part of the NAB Group of Companies. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances

Important: Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

 

Source: MLC General article newsletter

Insurance – giving you peace of mind in a crisis

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Insurance – giving you peace of mind in a crisis

If you’re a member of a super fund, it’s more than likely you have insurance through your super. The cost of this insurance is deducted from your super account balance – so you’re effectively paying for it – unless your employer is covering the cost on your behalf. To help you, we’ve identified some key things to ask yourself when it comes to your insurance inside super.

1. Is insurance inside super something you need?

Deciding whether you need to have insurance, is something that only you can answer as it really comes down to your own personal circumstances. We’ve listed some scenarios below to help you with this.

Scenario 1 — dependants

If you have people depending on you financially, and you died unexpectedly, could your dependants continue to live the same lifestyle without you? Would you and your family be able to meet your mortgage repayments, and what if you’re self-employed? How about if you were ill, or injured, and as a result unable to work for a period of time, or permanently? In these cases, having Death only, or Death and Total & Permanent Disability insurance, could help to provide financial security.

Scenario 2 — no dependants

If you don’t have anyone financially depending on you, but you were unable to work for an extended period of time due to an illness, would you be able to cover your expenses without an income? If not, perhaps Income Protection insurance is something to consider.

2. Which types of insurance inside super are most appropriate for you?

There are three main types of insurance cover available through your super.

  1. Death insurance cover

    This type of cover is designed to provide your family, or any nominated beneficiaries, with a sum of money if you were to die. It may also come with Terminal Illness cover which provides financial support if you are diagnosed with a terminal illness.

  2. Total and Permanent Disability (TPD) cover

    If you were unable to work ever again in an occupation that you are suited to, because of a disability, this type of cover pays you a lump sum which could help to pay for things like your living expenses or repay any debt you may have, such as your mortgage.

  3. Income Protection (IP) cover
    If you’re injured or suffer an illness, or have a disability and are unable to work for a temporary period of time, this cover would provide you with a short-term income stream to help you pay for things like living expenses or cover debts. 

So, what is income protection?

Income protection insurance is designed to provide an income stream if you can’t work due to certain reasons, like injury or illness.

Generally, income protection insurance will replace part of your income (up to 75%) if you’re unable to work due to injury or sickness and can’t work. However, this is usually subject to certain monetary caps. To receive benefit payments, insurers will typically require you to be totally or partially disabled or have a specific injury or sickness that renders you unable to work.

Key features of income protection

  • This type of insurance is designed to step in and replace your income should you become sick or injured. You can just set up your monthly payment and have peace of mind knowing you're covered if something happens.

  • You should look at income protection insurance as a financial safety net – it pays you a percentage of your wage, for a set period if you're unable to work due to a sudden illness or injury. So, if you had a serious car accident, and couldn’t work for six months, you'd get regular payments from your insurer – meaning you could focus on getting better without falling behind on bills.

  • For a monthly payment – usually around 1-2% of your salary – income protection insurance gives you peace of mind if you become too sick or injured to work. 

3. How much insurance inside super do you need?

Insurance calculators such as that available on the Moneysmart website  are a good starting point to work how much insurance you may need, depending on your personal circumstances. You may also want to consider speaking with a financial adviser as they’ll be able to assess your situation and advise which types of policies could work best for you.

Some things you may want to consider include:

  • The amount you’d need to cover your current lifestyle if you were unable to work for an extended period or permanently.

  • Whether you or your family could rely on other financial resources if you were unable to work or died.

  • Any debts you have such as a mortgage.

Bottom line: when deciding if having insurance inside super is beneficial, it really comes down to being clear about your own circumstances and what’s best for you. A financial adviser may be able to help in making this decision.

Please contact us on |PHONE|.

Source : MLC Insights August 2020 
 

National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. MLC Limited uses the MLC brand under licence. MLC Limited is a part of the Nippon Life Insurance Group and not part of the NAB Group of Companies. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.

Important: Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Source: MLC General article newsletter

COVID-19 investment opportunities

By | MLC General News | No Comments

COVID-19 investment opportunities

COVID-19 sent shockwaves across the world and caused share markets to fall hard and fast earlier this year. While some panicked, savvy investors have been looking out for opportunities.

So, what is it that differentiates the panicked investor and those who use a crisis to buy assets that become cheap overnight?

As the legendary French biologist, Louis Pasteur, said, “chance favours the prepared mind.” If you can invest knowing there will be crises that will temporarily reduce your capital (think the GFC, tech wreck, 1987) but remembering that these crises were also an opportunity to buy great assets at cheap prices, you will become a better investor.

Here are five other bits of “mind preparation” you can do to turn the next crisis into an investment opportunity.

1. Keep a long-term perspective

Unless you’re a trader – looking to make money from quick profits – it’s important to have a long-term investment view. We saw a major decline in share markets earlier this year – and a dramatic recovery. From the 1987 stock market crash to the bursting of the Tech Bubble in 2000, each crisis trigger is different and the time it takes to recover varies too. Recoveries can take months or even years – but history tells is that bull markets (periods when shares go up) typically last a lot longer than bear markets (where they go down).

2. Do your research

There’s a lot of ‘noise’ about the current state of the market, so keeping informed and getting an in-depth understanding about where you’re investing, is key.

Here are just a few of the things you could consider when looking at listed companies in the share market.

  • Does the company have a good track record?

  • Where does it get its earnings from, domestically or internationally?

  • How much debt does it have and when is it up for renewal?

  • How are the company’s earnings going to be affected by COVID-19?

  • Does the business have a strong competitive advantage?

  • Does it have stable revenue and income?

  • What are its risks in different economic environments?

  • What price would you be prepared to pay for shares in the company?

  • What are the risks specific to this company, its industry, and share market more generally?

If you decide to purchase shares in a company, consider monitoring it and any share market announcements, including financial updates or results, issues affecting the industry and any competitors. 

You may also want to keep an eye out for any news coverage and interviews about the business to get a feel for their current and long-term viability.

That’s just the beginning. You need to consider how you’ll reduce your exposure to the risks of investing in that company. Most people manage that risk by investing in many companies and asset classes because their performance is influenced by different factors.

3. Look for the red flags

It’s important to distinguish between companies who have seen their share price fall as a result of market panic, caused by events like COVID-19, and those that have fallen because they were already unstable.

To begin, consider how much COVID-19 will affect the company now and in the future. It’s also important to look at the company’s balance sheet and business model to see if it can withstand this pandemic, or if its prospects could be substantially compromised by economic stress. Other red flags to look out for include companies with a significant amount of debt.

4. Consider contributing regularly

One of the ways to take advantage of a market downturn is to regularly contribute a fixed amount to your investment portfolio.  The main benefit of this, as opposed to making a lump sum payment, is that it can help to reduce the impact of market volatility.

If you’re contributing the same amount of money as you were when markets were performing well, then when markets fall, you’re effectively purchasing at lower prices. For long-term investors, this is a great way of taking the guess work out of timing when to invest. The reality is, no one knows the best time to invest. Regular investing creates discipline – it forces you to buy in tough times (when prices are cheap, but people are fearful). And that can pay off over the long run.

5. Seek support from professionals

Investment manager

You may not have the time or resources to do the analysis required to identify quality long-term investments so investing with a professional investment manager is an alternative.

These companies have teams of experienced investment professionals doing the hard work for you and you pay them a fee for it. It’s important to consider if you’re comfortable with their investment approach and how they manage risk versus return.

Financial adviser

Obtaining independent advice from a financial adviser, before making any decisions, can help you design a plan to achieve your own financial goals. It may also provide you with a better understanding about the risks and rewards of investing and the appropriate investments for you.

Please contact us on |PHONE|.

Bottom line: share markets are unpredictable so remember to keep a long-term perspective. It’s important to stay informed and seek support from professionals.

 Source : MLC Insights August 2020 

 National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. MLC Limited uses the MLC brand under licence. MLC Limited is a part of the Nippon Life Insurance Group and not part of the NAB Group of Companies. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.

Important: Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

 

Source: MLC General article newsletter

Monetary Policy Decision – Statement by Philip Lowe, RBA Governor, September 2020

By | MLC Economic | No Comments

Monetary Policy Decision – Statement by Philip Lowe, RBA Governor, September 2020

At its meeting today, the Board decided to maintain the targets for the cash rate and the yield on 3-year Australian Government bonds of 25 basis points. It also decided to increase the size of the Term Funding Facility and make the facility available for longer.

Under the expanded Term Funding Facility, authorised deposit-taking institutions (ADIs) will have access to additional funding, equivalent to 2 per cent of their outstanding credit, at a fixed rate of 25 basis points for three years. ADIs will be able to draw on this extra funding up until the end of June 2021. This extension will ensure that all ADIs continue to have access to the Term Funding Facility after the end of September, when the window for drawings under the initial allowance of 3 per cent of outstanding credit closes. Additional allowances associated with an ADI's growth of business credit will now also be available until the end of June 2021. Further details are provided in the accompanying notice.

To date, ADIs have drawn $52 billion under the Term Funding Facility and further drawings are expected over coming weeks. Today's change brings the total amount available under this facility to around $200 billion. This will help keep interest rates low for borrowers and support the provision of credit by providing ADIs greater confidence about continued access to low-cost funding.

The Term Funding Facility and the other elements of the Bank's mid-March package are helping to support the Australian economy. There is a very high level of liquidity in the Australian financial system and borrowing rates are at historical lows. Government bond markets are functioning normally, alongside a significant increase in issuance. Over the past month, the Bank bought a further $10 billion of Australian Government Securities (AGS) in support of its 3-year yield target of 25 basis points. Since March, the Bank has bought a total of $61 billion of government securities. Further purchases will be undertaken as necessary. The yield target will remain in place until progress is being made towards the goals for full employment and inflation.

Globally, an uneven economic recovery is under way after a very severe contraction in the first half of 2020. The future path of that recovery is highly dependent on containment of the virus. High or rising infection rates have seen a recent loss of growth momentum in some economies. By contrast, in China, economic growth has been relatively strong. In financial markets, volatility is low and the prices of many assets have risen substantially despite the high level of uncertainty about the economic outlook. Bond yields remain at historically low levels. The US dollar has depreciated against most currencies over recent months. Given this and higher commodity prices, the Australian dollar has appreciated, to be around its highest level in nearly two years.

In Australia, the economy is going through a very difficult period and is experiencing the biggest contraction since the 1930s. As difficult as this is, the downturn is not as severe as earlier expected and a recovery is now under way in most of Australia. This recovery is, however, likely to be both uneven and bumpy, with the coronavirus outbreak in Victoria having a major effect on the Victorian economy.

Employment increased in June and July, although unemployment and underemployment remain high. The virus outbreak in Victoria and subdued growth in aggregate demand more broadly mean that it is likely to be some months before a meaningful recovery in the labour market is under way. In the Bank's central scenario, the unemployment rate rises to around 10 per cent later in 2020 and then declines gradually to be to still around 7 per cent in two years' time.

Wage and prices pressures remain subdued and this is likely to continue for some time. Inflation is expected to average between 1 and 1½ per cent over the next couple of years.

The economy is being supported by the substantial, coordinated and unprecedented policy easing over the past six months. Fiscal policy is playing an important role. Public sector balance sheets in Australia are in good shape, which allows for continued support. Indeed, fiscal and monetary support will be required for some time given the outlook for the economy and the prospect of high unemployment. In addition, support for the recovery is being provided by Australia's financial institutions, which also have strong balance sheets and access to high levels of liquidity.

The Board is committed to do what it can to support jobs, incomes and businesses in Australia. Its actions, including today's extension of the Term Funding Facility, are keeping funding costs low and assisting with the supply of credit to households and businesses. The Board will maintain highly accommodative settings as long as is required and continues to consider how further monetary measures could support the recovery. It will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3 per cent target band.

Source: Reserve Bank of Australia, September 2nd, 2020

Enquiries

Media and Communications
Secretary's Department
Reserve Bank of Australia
SYDNEY

Phone: +61 2 9551 9720
Email: rbainfo@rba.gov.au

Source: MLC Economic Monthly update

How To Build A Nourishing Breakfast To Satiate Until Lunch

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How To Build A Nourishing Breakfast To Satiate Until Lunch

Your parents weren’t kidding when they said breakfast is the most important meal of the day. Whether you enjoy it sweet or savory, hot or cold, earlier or later, there are a few non-negotiables you should be including. But the first step is eating your food mindfully. Mornings can be busy; getting the kids ready for school, rushing off to work, trying to fit in a workout and a quick load of washing – but taking an extra 5 minutes to sit down and eat your breakfast is one of the best things you can do to aid digestion of your meal.

Our good friend Dr. Libby even believes that this might just be the most important meal of the day. It doesn’t matter if you’re an early riser or an intermittent faster, fuelling your body with the right kinds of foods from the get-go is so important. And if you’re including good-quality, slow-burning foods, this meal will see you all the way till lunchtime – without the heavy snacking.

If you’re building a smoothie bowl or a hearty plate of whole foods, there’s a formula that we love to follow. It involves a balance of macronutrients (we’re talking healthy fats, complex carbohydrates, and good sources of protein), coupled with some micronutrient-rich superfoods. Your macro balance will be unique to your body’s needs, so if you have specific dietary goals in mind we recommend reaching out to a qualified professional. The most important thing is to reach for healthy, good-quality sources. We’re not interested in ruling out any food groups unless there’s a specific intolerance. In fact, having a breakfast that is largely made up of proteins, healthy fats, and micronutrient-rich complex carbohydrates (while limiting your intake of refined carbohydrates) can aid in both brain function and weight loss. Tucking into a delicious, balanced breakfast is also vital in balancing blood sugar levels for both managing and preventing diabetes, and done right, it can also be a good source of dietary fiber.

 

Here's why these are our four pillars of a well-built, nourishing breakfast. So read away and set yourself up for a nourishing day…

Help Yourself To Some Healthy Fats:

Fats are more than just deep-fried treats; not only are some good for us, they actually make up a vital part of our diet. Our bodies need them for brain function, long-lasting energy levels, and radiant hair, skin, and nails. Because they take longer for us to break-down, the energy they give provides for us when we’re depleted of carbohydrates. However, we only need a small portion to meet generic daily requirements. They’re that easy to throw on as an afterthought; a few of our favorites are avocados, flaxseeds and chia seeds, almond or cashew butter, free-range eggs, and fatty fishes like salmon, mackerel, and sardines. All of these foods contribute to a balanced intake of omega-3s – which is something the standard diet is often deficient in!

Cram In The Complex Carbohydrates:

Popular diets have made us a population fearful of carbohydrates, but it’s really not as simple as that. Carbohydrates come in all shapes and sizes, with the complex carbs often wearing the stigma of refined, bleached, heavily processed, and nutrient-poor carbs. Including carbs in your breakfast helps your body get the energy it needs for the beginning of the day. Vegetables, for example, are one amazing source of carbs – giving your body the much-needed glucose to carry out daily tasks, alongside an abundance of vitamins and minerals, and the all-important fiber. Fresh fruits are another wonderful source, although we recommend eating these first as many fruits shouldn’t be combined with other foods as not to impair digestion. Some of the best (in our opinion) ones to squeeze into breakfast are sweet potato, oats, bananas, spinach, and fresh berries.

Plate Up The Proteins:

Proteins give us something different from the other macronutrients; they break down to amino acids, which become the building blocks of our bodies. Many people are often living with protein deficiencies, so breakfast is another great opportunity to work it into your diet in the best possible way. And because they take longer to break down than your carbs, they’ll help to keep you feeling fuller for longer. Some of the best wholefoods sources that are perfect for breakfast are free-range eggs, peanut butter, yogurt, tofu scramble, or a good plant-based protein powder.

Make Sure You Have Micronutrient-Rich Superfoods:

We know a healthy, whole foods diet is more than balancing your macros. Vitamins and minerals are just as (if not more) important for your overall health and wellbeing, so it’s important to make sure you’re getting a dose with each meal. Some of the best ones you can include as a last-minute addition to your breakfast are blueberries, hemp seeds, maca & cacao blend, cinnamon, or an easy, supercharged greens powder. You can throw them in a smoothie or scatter them on top, but they’ll promise to fill out that well-rounded breakfast bowl you just built.

Source : Foodmatters August 2020 

Reproduced with the permission of the Food Matters team. This article by TESS PATRICK was originally published at https://www.foodmatters.com/recipe/how-build-nourishing-breakfast-satiate-until-lunch

Important: Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

 

Source: MLC General article newsletter

When Sleep is Elusive: Getting Quality Rest

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When Sleep is Elusive: Getting Quality Rest

We've all been there at some point — eyes wide open, trying not to look at the clock for confirmation that yes, despite trying every imaginable strategy it is 3:00 am and there are hours yet before the sun is due to rise. The consequences of this lack of sleep add to the already compounding worry as we think of what another day of work feeling less than refreshed is going to be like. 

Getting enough sleep affects your health in ways you cannot imagine. Sleep, like moving your body regularly and eating a nourishing diet, is one of the pillars of good health. We cannot fight our biology — sleep is essential to our very being. Lack of sleep can increase inflammation, which in turn is a risk factor for Type 2 diabetes, heart disease, high blood pressure and poor digestive health. Not to mention what it does to your mood, energy and appetite (hello 10:00 am pastry and coffee and 3:00 pm chocolate bar!). 

Typically sleep problems fall into two categories: trouble getting to sleep and trouble staying asleep. Here are some things you can do to ensure you get the quality rest your body needs. 

1. Work With Your Wake/Sleep Cycles

Going to bed and waking up at the same time each day can help to set a rhythm to your sleep cycle and prompt your body to recognize when rest time is approaching. A morning ritual such as meditation or yoga that reduces your stress can be extremely beneficial – and this can also be repeated before sleep. 

Move your body earlier in the day and avoid anything too vigorous at night, if possible. Movement, particularly movement that gets the heart rate up or is physically exerting, typically activates the sympathetic nervous system making you alert and awake, and subsequently decreases your melatonin (sleep hormone) production. Instead, in the evening, allow yourself time to slow down, unwind and stimulate your sleep neurotransmitters. Around 60 to 90 minutes before sleep, turn off your "devices", turn the lights down and maybe include some meditation or light reading. Finding sleep hygiene that works for you is incredibly important, but these are great starting points for everyone. 

2. Limit Sleep Disruptors

If you drink caffeine, find your threshold for the time you should stop drinking it. Typically, this is around midday as caffeine can stay in the body for around eight hours. Eating a heavy and rich meal late at night takes longer to digest, so your body is busy with the digestive process and indigestion rather than relaxing and helping you get to sleep. So eat smaller portions. 

TV screens, laptops and electronic devices not only keep your mind active but also emit light that disrupts sleep hormone production. If you watch TV, consider what you're watching. For example, if you're watching highly stimulating crime dramas it is very difficult to switch from this sympathetic nervous system stimulation to the parasympathetic nervous system responsible for rest and repair. 

Your biology has primed you to "fight or flight" and then, after you've turned the TV off, you're asking it to just forget what it has seen/experienced and drift peacefully off to sleep. For many of us that's not going to happen! If you're a crime or intense drama show addict, I encourage you to go four weeks without watching them, particularly at night, and see what happens to your sleep. 

3. If You Wake During The Night

Alcohol typically makes you feel sleepy at first, which is why people often use it to help them get off to sleep. But it often results in waking later in the night, typically around 2:00 -3:00 am disrupting sleep by stopping you going into REM sleep – the deepest stage. Limiting alcohol consumption is beneficial for overall health, not just for your sleep. 

Many people say they wake up in the middle of the night with their minds racing over their upcoming day. While part of this can be related to stress hormones, it can also be helpful to plan your day before you go to bed so you don't wake at 3:00 am thinking about something you forgot to schedule in your diary. Also try keeping a pen and paper by your bed; if you wake with a thought you can write it down and then address it in the morning. 

If you are experiencing a particularly busy or stressful period in your life and you’re noticing that your sleep is getting disturbed, remember the importance of looking after your nervous system to promote activation of your parasympathetic nervous system (PNS); your body’s natural rest and digest pathways. During these periods we can often find that our sympathetic nervous system, our “fight or flight” response, is activated for long stints of time and this impacts significantly on many biochemical pathways, including our sleep cycle. Ways to do this include reducing your consumption of caffeine (which signals adrenaline production) and avoiding it altogether later in the day, amping up our vegetable intake to maximize our nutrient consumption, meditation, Qi gong, tai chi or diaphragmatic breathing. 

There are many herbs that support good sleep such as lemon balm, magnolia, zizyphus and chamomile – however I encourage you to discuss your sleep issues with a qualified medical herbalist to find a solution that works for you.

Source : Foodmatters July 2020

Reproduced with the permission of the Food Matters team. This article by  DR. LIBBY WEAVER was originally published at https://www.foodmatters.com/article/when-sleep-is-elusive-getting-quality-rest

Important: Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

 

Source: MLC General article newsletter