Jen’s Note, June 2010
As the end of the financial year draws near we have again seen the share market test new lows. This time however we cannot put all the blame on overseas events. This time it is largely the actions of our own government that is causing the falls. The word has gone out to overseas investors to sell Australia. The proposed 40% extra tax on mining companies has made investors fearful that such a gross tax will flow on to other business sectors like the financial sector or technology sectors.
One reason why the interest rates were not increased by the Reserve Bank last week was simply that although they keep banging on about inflation the reality is that there is no inflation and the more likely risk is stagflation. That means that we have poor growth prospects because business is not being supported sufficiently by genuine opportunity that comes from real demand, rather than government stimulus, school building programs and insulation programs.
Such activities give false indications of the true state of the economy and as they cannot be sustained, reality can come as a shock to businesses that based their projections on such programs. All round the world countries that had stimulus programs are closing them down as the governments cannot afford to maintain them.
For those of you who are considering making extra superannuation contributions you should do it soon rather than leave to the last minute. You should also be careful of the contributions caps. If you are not sure do contact us so we can help you make sure you do not exceed your caps and get a nasty tax bill.
June 30 falls on a Wednesday this year so you need to be sure that you have the super contribution to your super fund by Friday the week before. It takes some time for contributions to be processed by the trustees and if they are not completed in time then there is the risk of losing your tax deduction.
The financial world in Australia is expecting an early Federal election, possibly as early as August or September. There is a state election due in Victoria this year as well, so apart from the schools and churches having their fund raising stalls and sausage sizzles at the polling booth, which is a real benefit to those organizations, there is a desperate need to have a clear vision for the economy.
Having our biggest industries in conflict with the government is not doing our economy any good, nor does it do our overseas reputation any good with those who are keen to do business with Australian companies. Many overseas investors are now standing on the sidelines waiting to see which way our economy will go under the proposed resources tax. They are doing this because it affects their pricing on commodities that they would buy. If we are going to be too expensive they will go elsewhere and Aussie jobs will go with them.
June does always seem to be the wet and gloomy month of the year, but wandering around the garden this morning I was cheered to see buds on my daphne plants. Knowing that June 21 is the equinox and that we will start to get a minute a day more daylight each morning, looking forward to longer days and spring is a most cheery thought .
Our new kitchen has given a whole new aspect to cooking again, so the weekend pot of chicken soup was a great joy. You know the sort of soup; lots of veggies and herbs and lots of chicken, we use about eight skinless thigh pieces and some macaroni. Jewish penicillin we call it; we both had sore throats but two days of good soup and we both feel like brand new.Lina the canine receptionist just loves chicken soup especially if she is having some when we are.
Looking at the weekend papers and all the people who get their pictures in the paper as a regular thing, it was interesting to see the rubbishy tack that they think enhances their lives and it made me think about what I really look forward to having. We like to eat the food of the seasons, so one of the delights I really enjoy is the return of navel oranges in the winter, and new seasons white onions to make sauce for tripe or fish.
Come August and it is the asparagus, cherries in November, home grown tomatoes in summer and fresh pears in autumn. Guess I will never be a fashionista. But looking forward to simple things that are within anyone’s reach is more likely to make people happy than the latest fancy handbag or shoes to fall off and break your ankle.
Our new back verandah is a delight as well; comfy old wicker chairs, hot coffee and the weekend newspapers plus a good cd playing and a snoozy dog at our feet. Beats getting in a plane to fly for several hours to sit on somebodies else’s verandah at great expense to do the same thing.
Builders and tradespeople do add a lot of comfort to life but gosh it is good when they all go home not to come back.
So keep warm, make a few pots of veggie soup, listen to some good music, borrow a few books from the library, put your feet up and relax and think about how lovely spring will be. Now don’t get too down hearted about maybe having to go out to vote in the cold, it will be good for your portfolio.
Best wishes and keep well,
Jen, Rose and Lina the Canine Receptionist
Lina the Canine Receptionist!