Monthly Archives: August 2015

ATO targeting rental properties

As reported in The Age today, the ATO is on the war path over rental properties, particularly those in holiday locations. Their activity will be focused on properties generating low rent but comparatively high outgoings, repairs & improvements, travel claims and apportionment of private use.

If you are unsure what you can and can’t claim, you can refer to the ATO’s guidebook which can be found at:-

http://tinyurl.com/npm6hjy

Or, if you can’t be bothered reading it or can’t understand those 44 pages, ask us.

And if you are thinking of buying an investment property, we have a calculator which models out what your future income / net tax loss will be as well as growth in equity in the property over 10 years. We also have a guidebook that steps you through all the things you need to know and do.

At MRS, we will spend today planning for your success tomorrow.

Why are the global share markets so volatile?

If you have some experience with the share market, you will know that it is always volatile. However the market has recently been very sensitive mainly due to:-

  • The contraction in China’s manufacturing sector.
  • Turbulence in Europe.

China has been re-balancing its economy towards services and consumption while trying to maintain its growth rate. Recently, it has taken steps to flood banks with liquidity to increase lending. While some markets are relieved that Beijing has finally stepped in, others are focusing on the dimming growth prospects for the world’s No. 2 economy. Its slowdown poses challenges to global growth, particularly to emerging markets. This is not new news. It didn’t suddenly hit the market on Monday as some sort of new development.

That said, we can expect more volatility because:-

  • The possible rise in US interest rates (which would be the first time since 2006) as its economy remains strong,
  • There are still questions about Chinese growth, and
  • The resulting ongoing weakness in commodity prices (especially iron ore and energy).

Through this time, it will remain important to stay calm and to focus on fundamentals.

Avoid reacting to sensationalised news headlines.

Why is it that every significant fall is a front page story yet a recovery the next day or by the next Monday is on page 32 or not even mentioned on the nightly news?   It’s no wonder so many fall into the trap of selling on down days and only buy in when the market is near the top. What is that saying from Warren Buffett – be fearful when others are greedy and be greedy when others are fearful.

A missed opportunity – no fries with that

I am amazed how often this happens.

During a break at a seminar the other day, I went outside for some fresh air and wandered, as I do, into a golf shop that was next door (some would say I still would have found it if it was three blocks away).

This was most fortunate as they had a great sale on a named brand of golf trousers– for those non-golfers, they were tailored specifically to the game of golf with an expandable waist, an outside tee pocket for tees (thereby saving the wear and disfiguration on traditional pockets), protruding and accessible pockets for scorecards and golf glove as well as other attractive features.

I digress slightly as the real point is they were cheap for their high quality. I thought this was as good as Christmas.

I therefore bought three pairs – and without my asking, he reduced the price further (therein lies a story for another day).

But an easy opportunity was lost.

I wasn’t asked if I would like to buy a belt or belts with those (nor indeed anything else for that matter). Golf shops sell belts. How easy would it have been to suggest buying a matching belt (particularity given one pair of trousers was a different colour from my existing golf trousers and shorts). Asking the question wasn’t going to stop me from buying the trousers which I had already decided to buy anyway. The question would have taken 5 seconds. The question would not have offended or annoyed me. Perhaps they had some belt with special features – waterproof whatever – that I may have happily bought.

For the sake of spending 5 seconds asking a question and perhaps making a recommendation, the chance to sell something else, at a normal margin mind you, was lost.

So who is at fault here?

I would suggest the store manager as they should better train their staff.  McDonalds worked this out long ago as the simple question do you want fries with that adds MILLIONS to their collective bottom line.   I would like to think our clients wouldn’t fall for the same mistake as we have software we use with your clients that shows the gain from increasing the number of transactions by each customer and increasing the average transaction value of those transactions. There is also the true cost of giving discounts – but as I said above, that is a story for another day…

Keeping pay records

Well last week’s blog on pay slip requirements created some traffic.

In light of that, this week it is opportune to remind employers that an employer is required to keep their time and wage records for 7 years.

They can be in electronic form or paper based. They must also be legible, in English and accessible to a Fair Work Inspector if they come knocking.

One common oversight is that when a business is sold, the new employer has three months to request the employment records form the former employer – you would be surprised how many times that a sale of business contract fail to address this handover.

For details on what you are required to keep (including leave records), go to:-

http://www.fairwork.gov.au/pay/pay-slips-and-record-keeping/record-keeping

 

At MRS, we will spend today planning for your success tomorrow.

Pay slips – what you must do

It always alarms me in discussions with new clients just how many of them don’t satisfy employment laws and obligations.

In particular, it amazes how many don’t provide complying pay slips to their employees. Many employers don’t even realise it is mandatory to issue all employees within 1 day of their payment.

Fair Work Australia provides all the information you need in respect of what employers are required to do in respect of pay slips (and related matters). They even provide a template for those who do not have a computerised payroll system.

Click on the following link to make sure that you are complying with your obligations.

http://www.fairwork.gov.au/pay/pay-slips-and-record-keeping/pay-slips

At MRS, we will spend today planning for your success tomorrow.