The following opinion piece is reproduced by permission from Joseph Palmer & Sons (VIC). For more information, please visit their website www.jpalmer.com.au
One of the many markets I keep an eye on is the world shipping market which trades on the Baltic Exchange in London. The dry index which measures shipping costs for commodities and so helps give a picture of the state of the global economy has traded to its highest level in two years.
The Senate passed the Treasurer’s superannuation reforms this week, most of which will come into effect from 1 July 2017; in summary they are:
- Introducing a $1.6 million transfer balance cap which limits the amount that can be transferred to the retirement phase, where earnings are tax-free. This measure will also apply to death benefit income streams.
- Reducing the concessional contributions cap to $25,000 for all taxpayers.
- Introducing a concessional contributions catch-up regime for those with total super balances of less than $500,000 from 1 July 2018.
- Allowing a deduction for personal contributions without testing the proportion of employment income received (the 10% test).
- Reducing the non-concessional contribution cap to $100,000 pa (or $300,000 under the bring forward provisions), limiting the ability to make NCCs to people who have a total superannuation balance of less than $1.6 million and introducing transitional rules for those who triggered the bring forward rule prior to 1 July 2017.
- Introducing a low income superannuation tax offset to replace the low income superannuation contribution (which will be abolished from 1 July 2017).
- Increasing the annual income threshold from $10,800 to $37,000 for eligibility for the spouse contribution tax offset.
- Abolishing the anti-detriment payment.
- Removing tax exempt earnings for transition to retirement income streams.
- Lowering the income threshold for Division 293 tax to $250,000.
Most American markets are closed for Thanksgiving. Major bourses around the globe traded higher yesterday with the only exception being Italy where investors are becoming more nervous ahead of the referendum on the 4th. December.
The Italian Prime Minister is seeking to free up the process of government by reducing the power of the Senate. Following the outcome of the British referendum and the US election investors are increasingly nervous about the outcome which if it fails will most likely lead to an early election and possibly a change of government. The increased feeling in Italy against the EU may just manifest itself in the outcome of a federal election and lead to Italy following Britain out of the EU, interesting times…….
Back home, index futures are showing a 19 point gain at 5516.
For more information, please visit www.jpalmer.com.au