Category archive: Finance News

News: Australia Lost Up to $4.8 Billion to Tax Dodging, Oxfam Reports

Tax dodging by Australian-based multinationals through offshore tax havens has cost Australia up to $4.8 billion in 2014, according to a new Oxfam Australia report.

The report claimed that Australia lost $4-4.8 billion in 2014 as a result of tax dodging. It also revealed that the top offshore tax havens used by Australian multinationals are Bermuda, Cayman Islands, Netherlands, Switzerland and Singapore.

The report followed the new data released by the Australian Tax Office (ATO) on Friday, which shows that 36 per cent of large companies, or 679 companies in Australia did not pay any tax in 2014-2015. McDonalds Asia-Pacific, Chevron Australia and Vodafone Hutchison are among the list of large companies that failed to pay tax.

In the report, Oxfam criticised the Federal Government’s plan to cut corporate tax further to 25 per cent in the next ten years.

“There is no winner in the race to the bottom on corporate tax,” said Muheed Jamaldeen, senior economist at Oxfam Australia.

The advocacy group said that tax incentives are ineffective to encourage payment due to the lack of parliamentary and public scrutiny.

“As a result, tax incentives are often ineffective and have become associated with abuse and corruption,” the report said.

“Tax revenues are needed to fund public goods and services, which contribute to the reduction of poverty and to the development of social and economic infrastructure.

“It is crucial that the Australian Government modifies current legislation so that multinational companies that function in or from Australia report publicly on their incomes, employees, profits earned and taxes paid in every country in which they operate.”

Dr Helen Szoke, chief executive at Oxfam Australia said the federal government should take action to make companies “pay their fair share”.

“The Federal Government must act swiftly and can no longer ignore the need for laws that will force big companies to publicly report on their incomes, taxes paid, profits and employees in every country in which they operate,” she said.

If you are an employer and looking to get a police check report for employees you can use National Crime check. They provide quick online police checks and offer bulk checks for staffing.

Oil rig

News: Investors Expect Oil Selloff Should OPEC Deal Collapse

As tensions arise between OPEC countries in the runup to the November 30 meeting, investors are preparing for the worst and expecting a fall in energy stocks should a deal fail to be clinched.

On Monday crude price fell by 0.3 per cent to $US47.1 per barrel, and energy stocks declined by 1.8 per cent.

Iran and Iraq have reportedly persisted on higher output numbers, according to unnamed sources.

“We hope we (will) have agreement,” said Jabar Ali al-Luaibi, Iraq’s Oil Minister on Monday upon arriving in Vienna for the talk. “We will cooperate with OPEC members to reach agreement acceptable to all.”

Experts expect oil selloff should OPEC fail to reach a deal. “People know if OPEC doesn’t do a deal, all the short-term drivers for the oil price will be off the table,” said Romano Sala Tenna, portfolio manager at Katana Asset Management.

Collapse in talks could send crude prices below $US40, said Fadel Gheit, managing director of oil and gas research at Oppenheimer & Co.

Others are more optimistic. There is a chance that OPEC could agree to cut production by more than 500,000 barrels, said Helima Croft, RBC Capital Markets’ global head of commodity strategy.

“OPEC’s leadership is cognizant of the risks posed by failing to reach a deal,” Croft wrote in a report. Should a deal be reached, Croft said oil prices could climb back to $US55 per barrel.

The Organisation of the Petroleum Exporting Countries will meet on Wednesday, November 30 in Vienna to establish the terms of its first production cut in eight years.

Commonwealth Bank

News: CBA Deposit Interest Rates Cuts Hit Savers

Commonwealth Bank (CBA) has cut a range of term deposit interest rates for the second time since August.

The bank blamed the cuts, which took effect last week, on changes in credit markets and the globally low- interest rate.

The rate cuts apply to six-term deposit products, spanning from three months to five years, by 5 to 15 basis points.

“The reason we have made changes to interest rates on some deposit accounts is due to the record-low interest rate environment, changes in underlying funding costs in local and international funding markets, and competitive conditions that affect the interest rates we are able to pay,” said Clive van Horen, executive general manager of retail products and strategy at CBA.

In August, CBA raised deposit rates and marketed it as a win for savers after the Australia’s big four banks passed on half of the Reserve Bank of Australia’s rate cuts to mortgage holders.

CBA reversed these cuts in September, and ANZ, NAB, and Westpac followed suit in October.

Stockmarket: Major US Indexes Close on Record Highs

All three major US stock indexes have closed on record highs on Monday night, following a rise in commodity and technology shares.

S&P energy index jumped 2.2 per cent, while .SPLRCT technology index rose 1.1 per cent.

Facebook increased 4 per cent to $US121.77 after announcing a $6-billion share buyback program on Friday.

LifeLock rose 14.7 per cent to $US23.18 following Symantec’s announcement to purchase the company for $US2.3 billion.

Applied Micro Circuits also increased 11.7 per cent after Macom Tech announced a $US770 million takeover of the company.

Oil prices have risen after Iran and Russia indicated that an OPEC deal could be reached in a Vienna meeting next week.

 

Markets at 8:40am (AEDT):

  • ASX SPI 200 futures +0.7pc to 5,393
  • AUD: 73.65 US cents, 69.31 euro cents, 59.00 British pence, 81.62 Japanese yen, $NZ1.0429
  • US: Dow Jones +0.47pc at 18,957, S&P500 +0.75pc at 2,198, NASDAQ +0.89pc at 5,369
  • Europe: FTSE +0.03pc at 6,778, DAX +0.19pc at 10,685, Eurostoxx +0.29pc at 325
  • Commodities: Brent oil +4.8pc at $US49.11/barrel, spot gold +0.41pc at $US1,213.20/ounce, iron ore -$US2.00 at $US70.50/tonne
trump

Stockmarket: Trump’s Election Win Boosts Market

Donald Trump’s unexpected election to US presidency has boosted the stock market.

Following Trump’s win, economists expect an economic growth of 2.2 per cent in 2017 and 2.3 per cent in 2018, increasing from 1.5 per cent the past year.

Inflation is also predicted to rise to 2.2 per cent in 2017 and 2.4 per cent in 2018. The Federal Reserve has been struggling to increase inflation above the 2 per cent threshold since the 2008 financial crisis.

Bank of America’s stock has climbed by 17 per cent since Donald Trump won the presidential election.

These changes and estimates are underpinned by the belief that Trump’s administration will push for deregulation and provide market stimulus through infrastructure spending and cuts in tax rates.

The Bank of America has indicated that for every 100 basis points increase, the Bank will earn $5.3 billion in additional net interest income.

Personal Finance: Debt vs More Debt – Are Personal Loans A Good Idea?

So you’ve gotten yourself into a bit of a pickle, and you can’t get out of it without some help. Without a lot of financial options, the easiest solution seems to be taking out a personal loan. But are personal loans a good idea? They seem to be a continued chapter of another financial burden. We take a look at the factors and types of personal loans that could be suitable for you:

A Secured Personal Loan

Having assets such as a house or car can be used as security for the loan. Your provider will take these assets into consideration, and possibly offer you a lower personal loan interest rate, as there is less risk to the provider if there is a loan repayment default. In the event of a default or inability to repay the personal loan, your assets can be legally seized by the lender.

In other words, you will need to make an accurate application with your chosen lender to make certain you are not under financial pressure to pay off the personal loan. It could be a good idea to have repayments automatically deducted from your pay or bank account to guarantee they are made on schedule.

An Unsecured Personal Loan

In this scenario, you won’t have any assets to protect the lender, and your personal loan will incur a higher interest rate. Nevertheless, the same rule of thumb applies, and you need to ensure that repayments are affordable and ongoing for the duration of the loan.

It’s a good idea to compare various lending institutions to make sure you get the best possible deal. A dollar saved is a dollar earned and a step closer to becoming financially solvent.

Interest Rates

As with other types of loans, there are several ways of making repayments. The most popular methods are Variable Interest Rates and Fixed Interest Rates.

Variable interest rates are influenced by the final decisions made by the Reserve Bank of Australia. Changes to the Reserve Bank cash rate filters down to the banks and their customers. Taking out a variable rate is the option to make additional repayments on the personal loan without incurring any additional fees – which can be a major perk. On the downside, the nature of variable means that your interest rate can go up or down at any time, and repayments could become unsustainable if finances are tight.

Fixed interest rates can provide you with confidence in knowing that your repayments will remain steady for the entire duration of the loan. The downside is that fixed interest rates are generally higher than the prevailing variable rate at the time of taking out a loan.

Additional repayments on top of your scheduled repayments may also not be allowed with a fixed rate, or will incur a fee. Extra charges in the case of early termination or a change of loan agreement are also the norm for a fixed interest rate loan.

All information sourced from: http://aussiefinanceblog.com.au/personal-finance/should-i-get-a-personal-loan-to-pay-off-debt/

Personal Finance: The Best Way To Save Up Your Money

Dinners on a budget, using no-frills home brand products and skipping small little splurges here and there may seem like the only real way to save money. But there are more refined tricks and life hacks that could easily save you a buck or two. Here are a few tips from The Simple Dollar that could help you sustain your finances and give you a lot more security.

Give yourself a goal

Setting yourself a goal can be the most challenging and rewarding ways to save money. Identify your purpose, why do you want to save money? What are you working towards? Are you saving up for a goal, a house, a holiday trip or an expensive pair of shoes? Give yourself a number and calculate between your salary and how much you’ll need to divide and set aside in order for you to reach your goal.

Keep track of your spendings

It’s not always easy to remember where all of your money is going. Keeping record of your spendings can help you track your patterns and bad habits in order for you to reduce excess costs and keep you spending on the right things.


Move bank accounts to take advantage of perks and earn more interest

According to The Simple Dollar, “if you’re paying a monthly fee for your checking or savings account, you would benefit from researching some of newest banking offers out there. Not only do some banks offer sign-up bonuses simply for opening an account and setting up direct deposit, but some offer attractive interest rates to new customers as well.

It’s true that interest rates are not what they once were, but it’s still worth a look. Some of the best free checking accounts and best savings accounts can be found online. Here’s a guide on how to make that switch.”

 Sell your goods

If you own any high quality products that are of value and not in use, it’s always a good idea to sell it to someone in need. This rewarding trade can help you earn a few extra dollars whilst also freeing up your home space for more important things. Consider selling your items on online platforms such as gumtree.com.au

Sign up for every free customer rewards program you can.

The Simple Dollar suggests that, “no matter where you live, you’ll find plenty of retailers who are willing to reward you for shopping at their store. Here’s the basic game plan for maximizing these programs: create a Gmail or Yahoo address just for these mailings, collect every card you can, and then check that account for extra coupons whenever you’re ready to shop. You can add to those rewards and discounts by using rewards credit cards to earn points on purchases at a wide range of stores that can be redeemed for cash back or other benefits.”

The 30-day rule.

The most important rules of personal finance is waiting 30 days before deciding to make a purchase. According to The Simple Dollar, “After a month has passed, you’ll find that the urge to buy has passed as well, and you’ll have saved yourself some money simply by waiting. If you’re on the fence about a purchase anyway, waiting a while can give you a better perspective on whether it’s truly worth the money.”

Avoid convenience foods and fast food.

 

As well as eating healthier, avoiding packaged frozen foods, takeaway or fast food can save you a lot of money as fast food items tend to cost a lot more whilst feeding you less.

CBA

News: CBA Delivers $2.4 Billion for First Quarter Profit

Commonwealth Bank of Australia has recorded a $2.4 billion profit in its first quarter, with slight slowdown in income growth compared to the previous year.

CBA said the decline was due to the falling interest rates, stronger currency and higher insurance claims.

In total, CBA’s full-year cash profit to June 30 amounted to $9.45 billion.

Westpac announced on Monday that its full-year profit amounted to $7.82 billion, while National Australia Bank delivered $6.48 billion and ANZ reported 18 per cent decline in profit to $5.9 billion.

Alipay CBA

News: Alipay Enters Australian Market With Commonwealth Bank Partnership

Commonwealth Bank of Australia have signed an agreement with third-party payment platform Alipay to allow Chinese tourists and students to use Alipay in Australia.

The deal will also enable Australians to use Alipay for purchases over AliExpress, a platform for Chinese merchants to reach global consumers.

“We are constantly working on payment solutions that offer flexibility and choice for our customers so the prospect of bringing them closer to a globally leading mobile payments provider, and its 450 million active users, is truly exciting,” said Kelly Bayer Rosmarin, group executive of institutional banking and markets at CBA.

Alipay said the deal is targeted at the 19,000 Chinese tourists who visit Australia every week.

“Australia is a popular destination for Chinese travellers and Chinese students studying overseas,” said Douglas Feagin, senior vice-president at Ant Financial Services and head at Alipay International. “We want Alipay users to enjoy the kind of convenience they are used to at home.”

Alipay’s parent company, Ant Financial was valued at $US75 billion in September.

China is the world’s largest market for mobile payment, with a transaction volume of $US235 billion in 2015.

Market: Latest Stock Market News – US Election

It has been reported on Monday that international stock markets has risen. With the Dow Jones industrial average increased by 371.32 points, this has suggested positive news for Clinton following the FBI email investigation.

According to an article on CBC, “Investors have been anxious in recent weeks over signs that the presidential race was tightening. Stock markets hate instability, and a Clinton presidency is being interpreted as a continuation of the status quo.”

CBC also reported that “A broader market index, the S&P 500, ended Friday on its longest losing streak since 1980 — nine days in a row — on fears that Republican candidate Donald Trump may ascend to the White House.” There was confidence on Monday as the market with the S&P reaching 46.34 points, to 2,131.52

Phil Blancato, CEO of Ladenburg Thalmann Asset Management has stated that “This is not a rational market. This is a reaction to less uncertainty,” “In those kinds of markets, people are jumping into stocks that they think are cheap. And what are the cheapest right now? Financials and health care.”

For Toronto’s stock market, the S&P/TSX composite index is rising by 143.20 points to just over 14,652.45.

Gold has lost $25.10 US an ounce to hit $1,279.40 US an ounce.

The December contract for light sweet crude dipped by 82 cents, closing at $44.89 US a barrel.

The Canadian dollar rose by 0.17 of a cent to finish at 74.78 cents US.