So, high inflation not all bad?

8 February 2023


With the recent release of the CPI figures for the December 2022 quarter, changes are set for superannuation as of 1st July 2023.

This has not yet been formally announced by the ATO so any advice will be pending the formal announcement and the outcome of the Federal Budget in May (the government could in theory freeze any changes that are currently scheduled to occur).

What are these proposed changes? 

Based on the December CPI figures, the general Transfer Balance Cap is set to increase to $1.9M.

Who might benefit from this change? 

For those that have not previously started a pension from their superannuation. The amount that can be transferred into the retirement phase of superannuation will be $1.9M (this is increasing from $1.7M). This means for some, an additional $200,000 may be held in the tax-free part of the superannuation system.

Existing superannuation pensioners. If you already have a pension prior to July 2023, the ability to increase what is held in pension phase will depend on your own personal Transfer Balance Cap. Some people may not be able to increase the amount in pension phase at all (if the prior general transfer cap had been fully utilised and this was either the original cap of $1.6M or the current cap of $1.7M).

People with high balances who are seeking to make further contributions. Additional non-concessional contributions (where a tax deduction isn’t claimed) may be possible for those members with balances between $1.7M and $1.9M. Additionally, the bring forward rule could be fully utilised for those members with balances under $1.68M. This means a non-concessional contribution up to $330,000 could be potentially made in a single financial year from July 2023.

What strategies should you be considering? 

For those considering starting a pension in this current financial year should you defer and wait until 1st July 2023?

Those considering contributions above the annual cap of $110,000 in the current financial year may be better deferring the contribution amount above the annual cap until after the changes take effect.        

Superannuation members with Transition to Retirement Pensions who are reaching age 65 prior to July 2023 may consider whether to defer converting to pension phase until after the changes take effect.

Please note that each of these strategies will depend on your individual circumstances and it is important to seek personal advice before taking any action.




Your Finance Update - January Summary

18 January 2023

Your Finance Update - January Summary

2022 – What a Year!  2023 - What can we expect? 

As the saying goes, “what a year!” As the world slowly emerged out of Covid lockdowns, two central themes have dominated 2022, inflation and geopolitics. Domestically the annual CPI figure has exceeded 7%. It has been a similar story across most economies globally. Years of low interest rates, central bank driven liquidity in the form of quantitative easing, severe supply chain disruptions caused by Covid lockdowns and the Russian invasion of Ukraine placing pressure on commodity prices have all contributed to the current inflationary environment.  As a result, interest rates have gone up, with key central banks committed to raising rates until inflation shows signs of abating. The rising interest rate environment has fuelled volatility in markets, with no asset class spared, as assets have repriced for the higher interest rate environment. Needless to say, it has been a challenging time for diversified portfolios as equities and bonds have both sold off.

Additionally, as the market has tried to digest the prospect of higher inflation, we also witnessed a sharp rotation into sectors and stocks that were viewed as being beneficiaries of higher inflation.  This is evident in the surge in energy stocks, with sectors such as healthcare and technology selling off irrespective of the quality of the company.

Despite the challenging market environment there have been some bright spots. Alternative assets have generally benefited from the increased market volatility and dispersion in returns. Unlike traditional assets, higher volatility is more conducive to alternative strategies, such as relative value approaches, as they can exploit market inefficiencies. Value-based investment approaches have also turned around a decade of underperformance relative to growth-style investing as growth stocks, which are viewed as longer duration assets, have been sold off. We have also seen many active approaches able to add value in this challenging period for markets as active investment managers have been able to sift through the market as assets have indiscriminately sold off. Finally, bonds which have been difficult to invest in for years due to the low interest rate environment are beginning to show signs of value as bond yields have risen.

In 2023 the themes of inflation and heightened geopolitical risk are expected to continue to be key focal points. However, the narrative will increasingly focus on the prospect of a recession as the impact of higher interest rates makes its way through the economy impacting households and ultimately demand which we expect will make its way to corporate earnings by Q3 in 2023.

At this stage our base case is not for a deep recession in Australia. However, on a global level Europe remains at greater risk of a deep recession as high inflation combined with energy security concerns resulting from geopolitical risks associated with the war in Ukraine continue to impact European markets. Central banks appear to be comfortable with the prospect of a recession as long as inflation is controlled. Against this backdrop we have been gradually neutralising our key active asset allocation exposures away from risk assets in favour of bonds.

The year ahead will be challenging with markets likely to range trade. Our dynamic asset allocation has added significant value over recent years as the decision to be long equities and underweight bonds was a relatively simple one. We expect that bottom up manager and stock selection will be a greater contributor to returns in 2023 as we continue to see increased dispersion in returns within asset classes as market volatility remains.

Market Developments during December 2022


Australian Equities

The Australian market concluded the year with the S&P/ASX 200 Accumulation Index falling by -3.2% and every sector finishing negatively. The Materials (-0.9%) and Utilities (-1.2%) led all sectors, as the broader market ‘Santa Claus Rally’ faded in December and investors evaluated potential global macroeconomic uncertainty moving forward into 2023.


The Consumer Discretionary (-7.0%) and Information Technology (-5.4%) sectors were the biggest laggards as the prospect of further hawkishness from global central banks weighed on investors. The Materials sector was the most robust performer as commodities were relatively steady amidst China reopening optimism and higher gold spot prices. Despite the broader market sell-off, volatility was relatively muted as Australian investors repositioned themselves for 2023 after a strong month in November. In 2022, Energy (+49.0%) and Utilities (+30.0%) were the strongest performers, whilst Information Technology (-33.7%) and Property (-20.5%) were the biggest fallers. Overall, the broader market decline ultimately meant that the Australian market finished the year with a decrease of -1.1%.


Global Equities 

Global equities ended 2022 with a monthly decline across most major indices. Emerging markets continued their relative strength against their developed market counterparts, recording a -2.6% loss according to the MSCI Emerging Markets Index (AUD) versus a -5.5% loss according to the MSCI World Ex Australia Index (AUD).

MSCI World Ex Australia Index (AUD) closed 2022 down -12.5%, and MSCI Emerging Markets Index (AUD) down -14.3%.

Across key global regions, there were few safe havens for investors to park their money, as the war in Ukraine, disordered supply chains, rampant inflation, and another year of Covid turned markets on their head. China’s CSI 300 Index had approximately one-fifth (-19.8%) of its valued wiped in 2022, followed closely by the USA’s S&P 500 index (-18.1%).


Fixed Interest

In its final meeting of the year, the Reserve Bank of Australia has again raised interest rates by 25bps bringing the target cash rate to 3.1%. Australian 2- and 10- year Government bond yields rose this month by 35bps and 52bps, respectively. The rise in bond yields resulted in almost every fixed income sector being in the red, resulting in the Bloomberg AusBond Composite 0+ Yr Index to return -2.06% over the course of the month.

The Australian unemployment rate however remains steady, supporting the growth outlook of the economy.

Globally, fixed income markets show a similar story, with US 10-year Bond yields up 27bps while US 90 Day T-Bill Yields remained relatively steady. On their December 14 meeting, The Federal Reserve raised the target federal funds rate to 4.25%-4.50%, with a rate hike of 50bps.


REIT’s (listed property securities)


Local and Global REITs sold off during December following two positive months. Domestically, the A-REITs index (represented by the S&P/ASX 200 A-REIT Accumulation Index) ended the month -4.1% lower. The index has returned –20.5% on a total return basis YTD to 31 December. Global REITs outperformed the local REITs index, albeit still experiencing a drawdown of –3.8% during the month. Domestically, infrastructure (represented by the S&P/ASX Infrastructure Index) has followed the trend in A-REITs, returning –1.44% in December bringing YTD performance down to 18.5%.


December was relatively quiet across the A-REITs sector. Some activity includes Dexus (ASX: DXS) announcing the sale of six properties with combined proceeds of $483m, two of which were trading properties. Centuria Industrial REIT (ASX: CIP) announced the settlement of a 50% interest in a portfolio of eight existing CIP assets for $180.9m to an investment vehicle sponsored by Morgan Stanley Real Estate Investing.

The Australian residential property market experienced a –1.2% change month on month in December represented by Core Logic’s five capital city aggregate. Brisbane (-1.4%), Sydney (-1.4%), and Melbourne (-1.2%) were the worst performers. Perth (+0.2%) was the only city within the five to advance. The %YoY change for Core Logic’s five capital city aggregate as of 31 December 2022 is –7.1%.

2022-23 Labor Government's Federal Budget: Building a better future

26 October 2022

On Tuesday, 25 October, the Labor Government delivered the second Federal Budget for the year, following the May election and change in government. The main themes of this budget were stated to:

  • provide responsible cost-of-living relief that delivers an economic dividend;
  • build a stronger, more resilient and more modern economy;
  • begin the hard task of budget repair to pay for what is important.

Only a small number of tax measures were delivered in this budget, mostly making good on the pre-election commitments to strengthen the laws targeted at multi-national corporations and strengthen tax integrity.

The budget now forecasts a cash deficit of $36.9 billion (1.5% of GDP) for 2022/23, and a redistribution of expenditure signals the new Government's change in focus.

Key budget announcements


  • No changes


  • Electric car discount – exemption of electric cars from FBT and import tariffs.
  • Taxation of COVID grants – additional grants listed as being non-assessable, non-exempt income.
  • Thin capitalisation – a partial rewrite of the rules.
  • Digital currencies – confirmation that digital currencies will be excluded from the taxation treatment of foreign currencies.
  • Additional funding provided for ATO compliance activities.


  • Audit cycle – the proposal for a 3-year audit cycle of SMSF’s will not proceed.
  • Downsizer contributions – minimum age to decrease from 60 to 55.
  • Residency rule changes – deferred from 1 July 2022 until the ultimate legislation receives Royal Assent.

Other measures

  • Paid parental leave – expanded from 1 July 2023, allowing either parent to claim the payment. Then, from 1 July 2024, the program will be expanded by an additional 2 weeks a year until it reaches 26 weeks from 1 July 2026.
  • Child care subsidy – maximum rate to be increased from 85% to 90% for the first child in care. The rate will increase for all families earning less than $530,000 in household income.
  • Regional first home buyer scheme – establish a fund to support eligible first home buyers in a regional area to purchase their first home with a minimum 5% deposit.
  • Penalty units – increasing from $222 to $275 from 1 January 2023.


Electric car discount
The Government has announced that, from 1 July 2022, it will exempt battery, hydrogen fuel cell and plug-in hybrid electric cars from fringe benefits tax and import tariffs if they have a retail price below the luxury car tax threshold for fuel-efficient cars ($84,916 for 2022/23) and providing the car has not been held or used before 1 July 2022. Employers will still need to include these exempt benefits in an employee’s reportable fringe benefits amount.

Taxation of COVID grants
The following COVID related grants have been added to the list of grants eligible to be treated as non-assessable, non-exempt income (meaning business are not required to pay tax on them):

  • Victoria Business Costs Assistance Program Four – Construction
  • Victoria Licenced Hospitality Venue Fund 2021 – July Extension
  • Victoria License, Hospitality Venue Fund 2021 – Top Up Payments
  • Victoria Business Costs Assistance Program Round Two – Top Up
  • Victoria Business Costs Assistance Program Round Three
  • Victoria Business Costs Assistance Program Round Four
  • Victoria Business Costs Assistance Program Round Five
  • Victoria Impacted Public Events Support Program Round Two
  • Victoria Live Performance Support Program (Presenters) Round Two
  • Victoria Live Performance Support Program (Suppliers) Round Two
  • Victoria Commercial Landlord Hardship Fund 3
  • Australian Capital Territory HOMEFRONT 3 and
  • Australian Capital Territory Small Business Hardship Scheme.

Thin capitalisation
The only announced significant rewrite of taxation legislation under this budget is to the thin capitalisation provisions. These rules essentially limit tax deductions in relation to debt for certain cross-border investments where certain limits are exceeded.

Under current legislation these limits are the greater of the amounts allowed under:

  • the safe harbour debt test
  • the arm’s length debt test and
  • the worldwide gearing debt test.

It is now being proposed to:

  • replace the safe harbour debt test with a new test where debt related deductions would be limited to 30% of profits (using EBITDA — earnings before interest, taxes, depreciation, and amortisation – as the measure of profit)
  • allow deductions limited under this new profits-based test to be carried forward and claimed in a subsequent income year (up to 15 years) and
  • replace the worldwide gearing test and allow an entity in a group to claim debt-related deductions up to the level of the worldwide group’s net interest expense as a share of earnings (which may exceed the 30 per cent EBITDA ratio).

Digital currencies
The Government has confirmed its intention to introduce legislation to ensure digital currencies are not taxed under the rules for foreign currencies unless a digital currency is issued by or under the authority of a government agency.

Additional funding provided for ATO compliance activities
While the Government has continued with its pre-election promise to crack down on multi-national tax avoidance and tax compliance by providing significant additional funding to a number of ATO programs, many of these programs apply to small businesses.

  • As a result, it is anticipated that there will also be a significant increase in the number of small business taxpayers receiving additional scrutiny from the ATO under these programs.


Audit cycle
The Government has announced it will not be proceeding with the 2018-19 budget announcement to allow self-managed superannuation funds with a good compliance history to have a 3-year audit cycle. Instead, the requirement for annual audits will remain.

Downsizer contributions
The Government has confirmed it will reduce the minimum eligibility age to make a downsizer contribution from 60 to 55 years of age.

Under this concession, an individual can make a one-off post-tax contribution to their superannuation of $300,000 per person ($600,000 per couple) from the proceeds of selling their home (noting there are certain conditions that need to be met).

Residency rule changes
The previously announced self-managed super fund residency rule changes have been delayed from 1 July 2022 to a yet to be determined date, after the associated legislation received Royal Assent.

These measures are intended to extend the safe harbour for the central management and control test from a 2-year to a 5-year period and to remove the active member test from both self-managed superannuation funds and APRA funds.

Other measures

Paid parental leave
The Government has announced it will expand the paid parental leave scheme from 1 July 2023 by making it more flexible. It will do this by making either parent able to claim the payment and both birth parents and non-birth parents eligible to receive the payment if they meet the criteria. Parents will also be able to claim weeks of the payment concurrently so they can take leave at the same time.

From 1 July 2024, the Government will start expanding the scheme by two additional weeks a year until it reaches a full 26 weeks from 1 July 2026.

Both parents will be able to share the leave entitlement, with a proportion maintained on a “use it or lose it” basis, to encourage and facilitate both parents to access the scheme and to share the caring responsibilities more equally. Sole parents will be able to access the full 26 weeks.

Child care subsidy
The Government has announced it will increase the child care subsidy rate from 85% to 90% for a family's first child in care and increase the rate for all families with less than $530,000 in household income.

The rate will lift from 85% to 90% for families earning with household earnings less than $80,000, and the subsidy rate will taper down one percentage point for each additional $5,000 in household income, until the $530,000 maximum limit is reached.

Families will continue to receive the existing higher subsidy rates for multiple children aged 5 or under in child care, with higher rates to cease 26 weeks after the older child’s last session of care, or when the child turns 6 years old.

Regional first home buyer scheme
The Government has announced it will establish a Regional First Home Buyers Scheme to support eligible citizens and permanent residents who have lived in a regional location for more than 12 months to purchase their first home in that location with a minimum 5% deposit. This will be limited to 10,000 places per year to 30 June 2026.

Penalty units
From 1 January, the Government will increase the Commonwealth penalty unit from $222 to $275.

For more information visit If you have specific questions about how this budget may impact you or your business, please speak with your local Boyce accountant.

Please note that the budget measures will only take effect once they become law.

WEBINAR - Economic Update with Thomas Pickett-Heaps

13 October 2022

On Thursday 13th October, Boyce Financial Services hosted a webinar with Thomas Pickett-Heaps giving an economic update.

Covered in this webinar was

• Market updates 
• Macroeconomics theme shaping the market 
• Portfolio construction 

The webinar was recorded and can be viewed below.


Apply for your Director Identification Number

16 September 2022

The deadline of 30 November 2022 is fast approaching, it is important that you apply for your Director ID as soon as possible if you haven’t already done so. 


What is a Director ID?

The director ID is a 15-digit unique identifier a director applies for once only and keeps forever, like a Tax File Number. It confirms a director’s identity and (once the functionality is available) will show which companies they’re linked to. The director ID will help prevent the use of false or fraudulent director identities.

How to apply

All directors must apply for your Director ID yourself as you will need to provide proof of your identity.

There are three ways you can apply:

Ø  Online – via myGovID

Ø  By Phone

Ø  By paper

Applying online

Step 1 – Setup myGovID

You will need a myGovID with a standard or strong identity strength to apply for a Director ID online. You can set up your myGovID here. When setting this up please make sure to include your middle name to help with data matching. It is also a good idea to ensure that the residential address on your proof of identity documents is the same as the address that is held by the ATO.

PLEASE NOTE: myGovID is different from myGov account.

Step 2 – Documents Required

You will need to gather some information that can be compared to information held by the ATO in order to verify your identity when you apply for your director ID. This includes:

· Tax file number

· Residential address as held by the ATO

· Need to provide information from two documents to verify your identity.

Examples of the documents you can use include:
- Bank account details (must be the same as what the ATO has on record)
- An ATO notice of assessment
- Super account details (must match the ATO records)
- A dividend statement
- Centrelink payment summary
- PAYG payment summary

If you require our assistance in finding this documentation, please contact your local Boyce team member.

Once you have your myGovID and two documents from the above list to verify your identity, you are now ready to apply for your Director ID online. You can get started online here.

Once you receive your Director ID you will need to pass onto the company secretary and Boyce team member or your ASIC agent.

Applying by phone – 13 62 50

To apply by phone you will need your Australian tax file number (TFN) and the information to verify your identity (see the list above).

Applying by paper form

If you are unable to apply online or by phone, you can apply by clicking on the following link for a paper form at Application for a director identification number. Please note this is a slower process and you will need to provide certified copies of your documents to verify your identity.

There are penalties for non-compliance

ASIC is responsible for enforcing director ID offences set out in the Corporations Act 2001. It is a criminal offence if you do not apply on time.

More information about the director identification number can be found on the ABRS website here.

Please contact your local Boyce office if you require further assistance.