Call us on 1300 794 893

The Experts

Peter Switzer
+ About Peter Switzer

About Peter Switzer

Peter Switzer is one of Australia’s leading business and financial commentators, launching his own business 20 years ago. The Switzer Group has since grown into three successful companies spanning media and publishing, financial services and business coaching.

Peter is an award-winning broadcaster, twice runner-up for the Best Current Affairs Commentator award for radio, behind broadcaster Alan Jones. A former lecturer in economics at the University of NSW, Peter is currently:

• weekly columnist for Yahoo!7 Finance
• a regular contributor to The Australian newspaper and ABC radio
• host of his own TV show, Switzer and Grow Your Business, on SKY News Business
• regular host of the Super Show on 2GB radio.


Dear Peter, What fun! You are really very good at what you do. I appreciated our time together and wish you continued success in all you do. Have fun (I know you will).

Jack Welch, former CEO, GE, and ‘Manager of the Century’ (Fortune magazine)

Peter, It was great to have worked with you – you really made the event come alive. I hope you enjoyed yourself. I know Steve Ballmer [CEO, Microsoft Corporation] did.

John Galligan, Director of Corporate Affairs & Citizenship, Microsoft Australia

Here’s a home truth, my only real education – or teacher who I actually ever listen to – is your interviews on Qantas. So thank you with sincere respect.

Sean Ashby, Co-Founder, AussieBum

Peter did a wonderful job on the night; keeping the program moving, working around changes to the run sheet, and ensuring each award recipient, and our sponsors, were made to feel welcome and important.
The feedback received from those attending has all been extremely positive.

Peter Mace, General Manager NSW, Australian Institute of Export

Peter, We would like to congratulate you for performing your master of ceremonies role in such a professional, entertaining and informative manner. We were impressed by your ability to tease out each winner’s story so that the audience gained maximum benefit from their collective business experiences.

Greg Evans and Nicolle Flint, Directors, Australian Chamber of Commerce and Industry

Hi Peter, I listened to you speak this morning and thought you were amazing. I am an accountant and in risk management and have never thought about doing a SWOT on myself – thanks for the tip!

Serife Ibrahim, Stockland Corporation Ltd

Dear Peter, Thank you for your valuable contribution to this year’s forum. Ninety-two per cent of delegates rated your presentation highly, commenting on its useful and topical content.

Catherine Batch, Head of Marketing and Communications, Indue

Peter has facilitated our CEO and CFO symposiums over the last three years. A true professional, he takes away the stresses of hosting and organising an event.

Justine Goss, Strategy Group

Bill backs down on punishing pensioners and public servants but who does he still hit?

Friday, March 16, 2018

Labor has now backed down on its tax refund reneging, well in part, by saying no pensioner will be hurt by their proposed promise to kill the cash payment from the tax office. These refunds go to owners of shares where the tax paid by the company linked to the stock (30%) is more than what the taxpayer is expected to pay.

Super funds pay 15% tax, so lots of SMSF trustees could get refunds. And then there are a lot of retired SMSF trustees and other retirees outside of super, as well as pensioners with small holding of stocks, all in the zero tax bracket, who’d definitely get a cash refund.

The public backlash has taught Bill a lesson but his back down won’t help retirees inside an SMSF with a moderate level of income. These people who can’t get a pension will have to give up their tax refund if Bill becomes PM.

However, the public servant’s Future Fund will be exempt. During the week, I was asked this question on air and I thought out loud that the Fund would collect a lot of tax credits. I suspected that therefore it would get a damn good tax refund and I now know how good, because Bill is exempting it from his drive to make the ‘super rich’ (as he called them) give up putting their snouts in the Government’s trough!

The AFR says last year the Future Fund received a tax refund of, wait for it, $817 million! The Fund was created by Treasurer Peter Costello to make sure we have enough money to pay public servants’ super pensions. Previous dumb governments thought the tax systems of the future would be able to cover future public servant pensions but Costello’s figuring said this liability to our civil servants was a ticking time bomb. “Cash payments for unclaimed dividend credits accounted for 24 per cent of the Future Fund's total dividend income in 2017,” the AFR reported.

Ironically, as Labor changed the rules for low income investors and super trustees getting tax refunds on their dividend payments, they gave exemptions to not-for-profit and charity organisations but super funds were not let off. Now we learn the Future Fund is a special case.

I should also inform you that the Fund is also exempt from tax as well, so it’s definitely a very special beast! Of course, I haven’t had an issue with this as the Fund was created to help out future taxpayers but it’s when you start seeing who gets special treatment and who doesn’t that you start wondering about the equity of all this.

It’s not surprising that a survey by the Australian Institute of Superannuation Trustees found more than half of property investors think property is a better vehicle for building a retirement nest egg.

This body that represents super is lobbying for changes to negative gearing and the capital gains tax discount and underlines the moves afoot by super funds to make their products more attractive than property.

The timing of this survey is interesting, as Bill Shorten’s tax refund policy is making a lot of would-be retirees start thinking about property as an alternative to super. As a financial adviser, I think diversification is always a good strategy and if someone can have a healthy super balance and a profitable investment property, then they would be comfortable in retirement, provided future governments don’t again shift the goal posts!

The interesting development from Labor’s foray into super is that it has reminded those with long memories and an interest in politics that the Opposition Treasurer, Chris Bowen, has talked about the possible need of taxing super on the way out.

He has expressed concern about wealthy Australians being in the tax-free zone. Given the backlash and the back down that followed, Labor is more likely to keep their future super policy cards much closer to their chests, if only for election-winning purposes!

That said, you can bet the Turnbull Government won’t let Labor forget this super mistake by Bill and his number crunching team. And I wonder if Bill and Chris have had a “what the f**k” discussion, following the media madness and mayhem that has followed their tax refund proposal.

That said, don’t forget that even Scott Morrison has done super goal posts shifting as well, with his $1.6 million cap. And you wonder why we like property over super!

| More


A Green's Batman rides to the rescue of refund robbed retirees!

Thursday, March 15, 2018

The crackdown on retirees and their tax refunds has become critical to the outcome of Saturday’s Batman by-election, where the Greens have outraged Bill Shorten by promising to fix his potential changes in the Senate.

So you could say a Greens Batman is coming to the rescue of flabbergasted retirees with a self-managed super fund. But wait, there are more who could be trapped by Bill’s tax refund clawback — there are really low income pensioners who get a small refund from the shares they hold outside of super!

Using Treasury figures, the Government says 97% of those affected have incomes of less than $87,000 and the PM says that “More than half are on incomes of less than $18,000 and 3.5 million superannuation accounts are going to be worse off as a result of this.”

You can never trust either side of politics when they come up with these numbers but Saturday’s election will be an interesting test of how acceptable Bill’s policy is, because it does affect say a middle income Australian with an SMSF as well.

You see, if I’m in the 32.5% tax bracket and I had my shares held outside of super, then I’d pay 2.5% more tax on my dividend. As the company has paid 30%, I only have to stump up the extra 2.5% in my tax bill.

However, if I have these shares in an SMSF, then the tax rate is 15% so I get a 30% minus 15%, which equals a 15% tax refund. It’s why we say a dividend can “gross up” to a higher yield.

Labor is really worried that the seat could go to the Greens. Batman was once dominated by David Feeney, who, like others, was found not to be a ‘real’ Australian, which meant he was thrown out of Parliament.

Making it worse for David, Bill Shorten wanted a more appealing candidate after the former Member for Batman was found to be a committed property investor, with negative gearing.

And while this pre-election revelation in 2016 is not illegal, the problem was Mr Feeney had failed to declare a $2.3 million house on his parliamentary register of interests, saying it was an oversight.

Bill lost the election by a whisker and I reckon David hasn’t had play lunch with Bill inside Parliament House since!

Another worrying consequence of Bill’s tax refund change proposal is that many are saying many will avoid shares and head for property or any other tax-charitable products, such as investment or insurance bonds.

So how could the Greens ‘Batman’ fix Bill’s policy?

They could give an exemption to those already retired but put a cap on the size of the refund. After all, the Government put a cap on how much you can have in your super fund of $1.6 million when you go on to a tax-free pension.

Labor has admitted that 1.2 million taxpayers will be affected and 14,000 on a full pension will lose their tax refund. And I wonder if the numbers could actually be higher? That aside, why wouldn't Labor want to give exemptions?

The trouble with most tax changes aimed at the wealthy is that if Bill designed a tax policy to get the really wealthy types, the number would be too small to really rake enough cash to justify the political heat.

Bill has gone after $5 billion by killing the tax refund. If he gives fair exemptions, the gains would be whittled down to where I don’t know.

Ultimately, it would be determined by where Labor set the income level that says a retiree is wealthy to be slugged.

If someone is on $50,000 from a super pension and $5,000 is the tax refund from shares, if you take that $5,000 away, it’s a 10% loss and it could mean that private health insurance or running a car becomes unaffordable.

On $50,000, a retiree could be comfortable in retirement but on $45,000 they’d be starting to feel the pinch.

Politically, this becomes an even bigger problem when the children of these retirees start hearing about how Labor proposes to make their life really less enjoyable.

That’s why the Greens ‘Batman’ is riding to the rescue. "We want to make sure that these proposed changes don't accidentally end up hurting the very people Labor says they want to help," Senator Di Natale told the AFR.

| More


Will our economy be run by Mr T or will we have to put up with BS?

Wednesday, March 14, 2018

In case you thought I was a hopeless optimist who seizes all things positive and ignores the negative when it comes to our economy and stocks, I’d like to inform you that the Organisation for Economic Cooperation and Development has given us the big thumbs up!

This Paris-based economic think tank has agreed with the Reserve Bank and Treasury, predicting we should grow by 3% this year and next year. And in case you’re not an economics tragic, like yours truly, 3% is the magic number for economic growth, where historically jobs are created. The bigger the growth jump above 3%, the bigger the jobs jump, so this is a good news message for businesses, consumers, job-hunters and a struggling Malcolm Turnbull.

I hope he’s got the rocks to capitalise on this great economic setting for the next election. And I would recommend to him (as I do to many who ask me for advice on business and wealth building) that he learns from legends.

Success leaves clues, so if I want to be a better stock market investor I’d learn from Warren Buffett. If I wanted to build a business brand then Richard Branson or Frank Lowy, who both started small and became huge, would be great role models to learn from and in politics Malcolm could do worse than to study the ABC documentary on Bob Hawke.

Sure Lucy — the first lady — would prefer Malcolm to ignore Bob’s wandering eyes and affairs but gee, the PM really needs to embrace Bob’s love affair with the Australian people.

Like Bob, the Australian people (to steal a US term of endearment) like one thing about Malcolm and that’s his brain.

Who really wants to be led by a dope? We want our leader to be respected overseas but we want him to be respected even more at home. And that’s the piece Malcolm has to work on over 2018.

With our economy tipped to pick up growth from 2.1% to 3% this year and close to 400,000 jobs expected to be created, Malcolm has to step up or it will be Prime Minister Shorten we’ll be dealing with in 2019.

Bill’s drawn battle lines to go after the economically well off, even if they have been former working class strugglers, who have worked and saved their way to a comfortable life in retirement.

His crackdown on negative gearing, the capital gains tax discount and tax refunds to lots of retirees who invest in stocks, shows he’s worked out who might not vote for him and he’s gone after them. Meanwhile, he’s well and truly courting those who are a good chance to be Labor lovers.

It’s clever politics — classic divide and rule — but it’s divisive. And that’s Malcolm’s opportunity. He has to try to be like Hawke who was the master of inclusiveness. He has got a year to get out amongst his “fellow Australians”, as Bob would often say, and not just sell himself. But like Bob, he has to love his potential followers.

That’s what’s missing and luckily for Malcolm, Bill’s not a great man of the people either, but as the polls show, his Party is in front — 53 to 47 on a two-party preferred basis — and Malcolm is losing his lead as preferred Prime Minister. This was Malcolm’s biggest plus, aside from the improving economy I’ve been predicting, but now the score is MT 37 and BS 35.

Once upon a time, it was Malcolm first as loved PM, daylight second and Bill was like Prince Charles, when he had to be driven home from a cross-country event when he was a schoolboy. He got back only just in time for supper!

My interest in Malcolm over Bill is that with the economy now tipped to be producing the best growth since the GFC, do we really need a change of government? I prefer to kick governments out when they’re failing and despite an unhelpful Parliament setting, which we voters created with a crazy supply of independents and odd-ball parties, the economy has still managed to keep improving.

And to be objective, Bill’s policies are not really pro-business and right now I don’t think, with business conditions and confidence really riding at highs, that a change of government is a great idea. That said, Malcolm has to be worth keeping, so he is the hope of the business side and anyone who thinks the economy doesn’t need a radical Labor plan right now. 

One day their prescriptions might be needed but I’d argue, not now. And if Malcolm could show us some return love for us making him our leader,  he actually could win the next election.

But he’s got a lot of work to do and he has to start today!

| More


Labor is going after 'cursed' SMSF retirees!

Tuesday, March 13, 2018

Labor’s planned assault on those ‘cursed’ self-funded retirees and anyone with a self-managed super fund continues, and it puts enormous pressure on the Turnbull Government to lift its game, or else those who get tax refunds from investing in shares will lose a lot of money!

Labor’s number crunchers think its proposed rule change will deliver Treasury $5.6 billion in the first year rising to $8 billion over time. And it’s calculated that more than a million shareholders will be affected.

The AFR’s Phil Coorey has been briefed on a speech Mr Shorten will make to a KPMG get together in Sydney where he “will stress that those affected – about 200,000 of the 600,000 who use self-managed superannuation funds along with another 1.2 million taxpayers – will not pay any more tax. But they will not be entitled to a cash refund if their imputation credit on their dividend is more than their total tax bill.”

That’s like a charity telling a down and out person that they won’t take any food from you but they won’t give you any either.

To make the story look like another crackdown on the wealthy, we’ve been told that 50% of the refunds go to the wealthiest 10% of SMSFs and the top 1% of these pocket annual average cash refunds of $83,000.

But this is a better statistic to think about — 90% of the money accrues to SMSF trustees/ retirees, which represent less than 10% of all superannuants. However, that would be most of those retirees who have an SMSF!

For those who don’t understand how someone gets a tax refund from the dividend imputation system, here’s a simple explanation.

If you have shares and your tax rate plus Medicare levy is 47% and you receive a dividend from your shares, then this income has already been hit by the company tax rate of 30%, so all you would pay is 17% on your dividend income.

Dividend imputation was meant to kill the double taxation of dividend income. However if you are a low income Australian with a tax rate under the company tax rate of 30%, you get a tax refund.

If you are a retiree in the tax-free zone, then you could get all of your tax on a dividend repaid to you.

This is good for retirees who aren’t on the pension and helps the stock market, as shares become attractive to retirees. So Labor’s plan could hurt the stock market and even the super funds they love — the Industry Super Fund sector!

The changes would start from 1 July 2019 and will hit earnings and franked dividends in the 2020-21 financial year.

Charities and not-for-profit outfits such as universities will be exempt.

Labor leader Bill Shorten is going back to the Paul Keating-designed dividend imputation system, which was changed in 2000 under John Howard and Peter Costello.

In those days, it cost the Budget $550 million but it’s now closer to $5 billion but over that time there has been a growth of self-funded retirees who were encouraged to look after themselves after finishing work.

Those Australians won’t be taxed any more under these changes but money they live on will no longer be coming down the pipe from Canberra.

These people will buy less stocks and the stock market will be affected and the economic implications — these people will be poorer consumers! — could surprise the architects of this policy.

Sure, Labor will spend the money on other areas that could help the economy but these Australians will be poorer for the experience.

One final point. You have to be careful about looking at economic numbers in isolation.

Sure, the tax benefit to retirees of $5 billion is big but these people don’t draw a pension so there’s a saving there. They spend their money so they pay the GST and they often help their families with their excess funds, which can be a plus for society as well as the economy.

But what I think is worse is the shock factor delivered to retirees. This morning around 1 million Australians will be wondering what’s going to happen to the money they live on.

Remember, Labor has revealed that 50% of the refunds go to the wealthiest of SMSF trustees but it means the other 50% is doled out in small amounts to the 90% of SMSF trustees.

These small amounts will be a significant loss to these lower income trustees.

Sometimes I wish governments and would-be governments could actually come up with productivity-generating ideas to increase the nation’s income rather than creating policies that set Australians against Australians.

When the so-called wealthy get targeted in these tax-grab policies, there are a hell of a lot of middle class Aussies who have worked hard, played by the rules, have not taken Government handouts for most of their life and now become targets because they have become self-funded, under current rules, with a tax refund.

The irony is that many of these less wealthy SMSF trustees could go on to part-pensions because they lose their refunds and that means Labor’s calculations of gains might prove less than what’s expected!

So it could be a lose-lose policy change. I hope Labor works out a way not to punish the 90% of SMSF trustees that divvy up 50% of the total tax refunds from dividends.


| More


Just how bad are banks? Do they deserve the hate?

Monday, March 12, 2018

In today’s SMH there’s a story about how banks could be cut out of our lives, but the Government/RBA would have to step up and be the banker. And there’s another saying “after 73 inquiries the banks know their time is up…there’s a reason Australia’s share market heavyweights are all lawyered up to the teeth.”

The two yarns prove that bank bashing is a national sport here in Australia. If the truth be known, I’d argue that banks are hated worldwide.

The famous US comedian, Bob Hope, summed up our suspicion about banks with this classic joke: “A bank is a place that will lend you money if you can prove that you don't need it.”

And then there’s the one I’ve told for years; that a bank is a place that will lend you an umbrella when it’s sunny and then want it back as soon as it rains!

Don’t get me wrong, banks have behaved badly in the past and I think this Royal Commission will turn up a few cases where we will say “unbelievable!”. However I think the biggest conclusion will be that CEOs of the past have let their customers and their brand down, which ultimately hit their share price by not fixing up the problems root and branch in their organisation.

Yep, individuals have been hurt and treated unfairly by banks and so have small business owners. On the other hand, many bigger businesses have taken the banks for a ride.

As the old gag/adage goes: “If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem."

For a large chunk of the population, a lot of hate for banks has come from those times when our home loan interest rates were pushed up relentlessly. In the late 1980s, the home loan rate went to 18% for some borrowers but that was driven by the Reserve Bank.

Most bank rate rises on our homes is led by the RBA but banks have been quick to raise and a tad slower to cut when the cash rate was falling.

Recently, property investors have been given a rough time with some borrowers seeing former promises of a loan withdrawn. Others have been denied interest only loans. In most cases, the bank’s hardball plays were on the direction of the Australian Prudential Regulatory Authority (APRA), aided and abetted by the RBA and the Treasurer.

Let’s face it, are banks really that different in their anti-customer behaviour from telco companies, energy businesses, retailers with their exorbitant store cards and lawyers that overcharge? And let’s not leave out local councils that have computers that are programmed to say “no” to just about every dream you need permission for from these dream-spoilers!

On the flipside, for many of us, banks have actually been accessories before the fact in many of our greatest economic successes. Let me remind you:

  • When they said “yes” to a loan that saw you buy your dream house/
  • When they did lend money to you and your business that helped you grow a successful, income-giving business that you later sold at a big profit.
  • When they sneakily got into our lives with their saving plans introduced to us at school, which were marketing strategies but they turned us into savers, which helped when it came to buying important stuff in our lives; and
  • I reckon a lot of our super balances have been driven by the success of the banks’ share price and their great dividends that smart super funds harvest to produce the fantastic results we’ve seen since 1992.

As Warren Chant from Chant West showed us, our super funds’ performances have been great. “Over an extended period that includes the worst financial crisis that most of us can remember, funds have returned 5.8% above the rate of inflation,” he calculated. “That’s a very substantial boost to the real wealth of their members.”

Sure, bank’s super funds had a history of charging too much for super in the early days but once competition came from industry super funds and the growth of self-managed super funds, they had to lower their fees.

And sure, their fees remain high for the person who doesn’t check them but overcharging the unwary is not the sole domain of the banks.

Telcos, airlines, energy companies, insurance companies, lawyers, etc. all do the same. So do corner shops compared to Coles and Woolies but these guys too can attract you to their stores on specials, then overcharge on other products once they’ve got you inside.

Banks have got away with blue murder because governments never had the guts to have a proper disputes resolution system for customers of banks. Like a lot of bank bosses, Treasurers never had the guts to force banks to have an objective, judicial system to give customers a fair go.

I’m told the Banking Ombudsman was a good service but I always ask: “Well, how come we have a Royal Commission driven by an accumulation of bad bank stories involving their customers?”

State government have consumer claims tribunals, which work well, but governments have been accessories to banks behaving badly.

I like the fact that our banks are safe because we underwrite them with our taxpayer’s money but governments in the past should have used this to make them behave better. That safety and our role in keeping them safe explained why out top four banks were in the best 10 banks in the world during the GFC.

This helped explain why our unemployment rate didn’t go over 6% during that time, when the world’s economies went into recession and we didn’t.

Like a lot of other businesses and like a lot of people, banks have some problems that need to be attended to but they have also been accessories to a lot of great things in our lives: homes we bought, businesses we grew and wealth we generated.

I know overdraft interest rates have always been high but when our business grew and we had big customers who paid late (more businesses behaving badly), it was a bigger bank overdraft that kept us in business, kept growing our operation, which kept us employing young Australians and doing more businesses with other businesses.

I know banks can be bastards for individuals but they also have had some help from many of us who don't do their money homework, who are lazy when it comes to looking for alternatives and so, in many ways, we have been accessories to our own mistreatment.

If this Royal Commission is of any real value to us, we’ll see a proper disputes resolution system put in place to ensure big banks don't behave badly to individuals and businesses.

This will help us, the banks’ brands and their share prices, which will help our super funds.

Who said economics is a dismal science?

| More


How will Trump's tariffs hurt our economic growth and your income?

Friday, March 09, 2018

The Trump tariff terrorist play continues to spook the market. This threat of the unknown about the extent of the tariffs, what companies, as well as what countries will be badly affected if a trade war results, are all questions worrying market-influential stock players.

And ahead of the President giving details Thursday afternoon US-time (or Friday morning our time), Donald has tweeted the following: “Looking forward to 3:30 P.M. meeting today at the White House. We have to protect & build our Steel and Aluminum Industries while at the same time showing great flexibility and cooperation toward those that are real friends and treat us fairly on both trade and the military.”

So I guess we’ll see if we’re friends with Trump USA by 8 am and then our stock market will try to work out if the overall implications of the tariff changes will be a positive or negative. Of course, if we get treated well but China gets screwed, then that could be bad for us and the likes of BHP, Rio and Fortescue.

Meanwhile, we have another economic curve ball to deal with and that’s the weaker than expected economic growth number we saw on Wednesday. The consensus of economists expected 0.5%-0.6% but it came in at 0.4%. This disappointed an optimist on the economy like yours truly but there were some surprisingly good aspects of this data that has kept my hopes up that 2018 will be stronger than 2017.

Now remember this was the last quarter growth of last year and here are the big revelations:

• The economy grew by 0.4% in the December quarter after growing 0.7% in the September quarter.

• Annual economic growth eased from 2.9% to 2.4%.

• The biggest contribution to growth came from household consumption (+0.6 percentage points), government consumption (+0.3pp), public investment (+0.2pp) and private equipment (+0.1pp).

• The biggest drag on growth was from private non-dwelling construction (-0.5pp), net exports (-0.5pp) and dwelling investment (-0.1pp).

• 13 of the 19 industry sectors expanded in the December quarter.

• The best growers were Information media and Telecommunications (+2.9%) and Rental, hiring and real estate services (+2.5%).

This was CommSec’s Craig James’ take on the numbers: “The annual rate of economic growth eased in the December quarter of last year but that’s to be expected – figures bounce around from month to month and quarter to quarter.

“And it is even more understandable given the length of our record economic expansion but economic growth is likely to lift over 2018. We share the Reserve Bank’s view that growth will be stronger this year than last year.”

He thinks the economy will grow by 2.9% in 2018, after 2.3% growth in 2017.

What I loved was the fact that consumer spending finished 2017 strongly and James says it will be supported over 2018 by a stronger job market, low interest rates and slightly firmer wage growth. Meanwhile, he argues “business spending will be supported by record profitability, domestic infrastructure projects and a buoyant global economy.”

This is all good stuff for an optimist but I like this as well from James: “It is always important to remember that two months have passed since the economic growth figures. And more recent data suggests the economy has started 2018 with solid momentum.”

Thank you Craig. So it looks like my optimism on our economy, based on the recent run of data, is credible but wait there’s more to this subdued growth story for the December quarter.

This is what Shane Oliver from AMP noted about the numbers: “There is good reason to expect growth to continue and pick up a bit: the drag from falling mining investment is nearly over, non-mining investment is turning up, public investment is strong, trade should add to growth and profits are rising. But growth is likely to be constrained to just below 3% this year and underlying inflation is likely to remain low.”

What I liked was the fact that “household spending accelerated sharply, lifting by 1% over the quarter — the largest increase in over a year — helped by an even larger increase in employee wages which grew by 1.1%.” (Business Insider)

Remember many experts were telling us that the consumer is dead and buried and forget wage rises but it looks like the Aussie consumer is up and walking with more dough in their pockets.

Also an against-the-trend fall in exports dragged this growth number down and actually subtracted from the improvement in the domestic economy.

As Craig James and Shane Oliver implied, trade is expected to add to growth over 2018 and, of course, this is where the Trump tariffs will have a lot of importance to us.

The tariffs themselves, plus the possible global trade war that results, could hurt our exports and that could then hit our economic growth performance across 2018.

We didn’t need these terrible Trump tariff tantrums timed to trash our potential economic growth.

Not happy Donald. Not happy!

| More


Cohn Gone! Trump king slayer needed and fast!

Thursday, March 08, 2018


Who in the hell is Gary Cohn and why is he hurting out stocks and super fund balances? I was staggered yesterday when one of my bright colleagues admitted not knowing who Gazza was! This surprised me when you see his resignation from the Trump team in the White House has cost the Dow Jones index over 300 points before the close.

The irony of the stocks slide on Wall Street overnight was that before trading started in the US, European markets were higher on more serious talk that Europe would retaliate if Donald goes ahead with his tariffs that threaten a global trade war.

So who is the guy whose exit has created this Cohn collapse of stocks?

His very title quickly explains why Wall Street does not like his resignation. He is the President’s chief economic adviser! Tariffs are very much an economic issue and Cohn was reported widely as being against these trade war starters, so he’s basically said: “Enough is enough, I’m out of here!”

So why was Cohn rated so highly? Well, he was formerly the president and chief operating officer of Goldman Sachs from 2006 to 2017 and this outfit is seen as one of the smartest and most powerful investment houses on the planet. Many see him as a genius and that’s why Donald went after him. He’s credited with being crucial to getting the tax cuts through the Congress and now he’s gone.

I’m surprised no one has run with the Donald Trump-King Aerys II Targaryen comparison, when you see the exit of top aids from Donald’s team. This improbably named monarch is a mythical figure out of the blockbuster TV series called Game of Thrones. The mug in question is popularly called "the Mad King" and was the last member of House Targaryen to rule from the Iron Throne!

Excuse my graphic imagery for those who think in pictures as I do but who isn’t seeing the US President as an emperor with no clothes sitting on the infamous Iron Throne?

I’m sorry to do this but this picture borders on the ridiculous but it links up accurately with what seemingly is going on at the White House now.

So how nervous am I right now about the value of our stocks and inevitably your super balances, as a stock market slump could easily happen if this Trump tariff tantrum turns into a trade war?

The answer is more nervous than I was before Donald came up with this dumb idea. Sure he promised this economic madness before elected but politicians hopefully develop into real leaders when given the task to lead a country. What happens with great leaders is that they have the guts to realize that keeping a dumb promise that helped them get into power, which uninformed voters liked, would mean they would remain a politician rather than a great leader.

Great leaders become special human beings, while politicians on the hustings are often just like hustlers trying to make a sale. They will say anything to get the prize but real, memorable leaders come to know the errors of their ways when they are asked to consider the interests of an entire country.

And with Donald’s gig, he’s got the fate of the world in his hands but unfortunately he remains a hustler and a great salesman but unfortunately he’s peddling a ‘crap product’.

This Cohn loss to his team is a problem as he is left with sycophants, who will tell him what he wants to hear. And so global trade and stock markets along with our stocks portfolios’ values and our super balances could pay the price unless the President starts acting and thinking like a President/leader rather than hustler/mad king!

What is needed right now is a ‘king slayer’ and undoubtedly special counsel Robert Mueller whose looking into the Trump-Russia connections pre-election could be the guy.

The latest news on that front is that a mystery man, who apparently was in a key meeting with Russians and Trump people, is now singing for Mr. Mueller.

“George Nader, a low-profile diplomatic go-between who has forged close ties to the Emirates, was stopped and questioned by the FBI at Dulles International Airport in January as he returned from an overseas trip, these sources say,” CNN says. “Since then, he has been talking to Mueller's investigators and providing information to the grand jury.”

This guy and the grand jury might one day be the king slayers who bring down the House of Trump.


| More


Paul Keating kept you from the poor house and here's how l'll keep you out of it!

Wednesday, March 07, 2018

As Wall Street struggles with the Trump tariff tantrum with stocks in and out of the red, a bigger story for average Americans (which could explain why a lot of Yanks liked Donald’s less conventional policies and thoughts) is the revelation that 42% of Americans are at risk of retiring broke.

A CNBC report into work done by a website called GoBankingRates, says 42% of Americans have less than $10,000 saved for when they retire!

This made me think of the average Aussie now whose potential nest egg is bound to be a damn size bigger because of one man — Paul Keating — and his hard-nosed policy of forcing us all into his compulsory super system.

The latest numbers I could access shows how better off we are.

 In December 2015, the Association of Superannuation Funds of Australia (ASFA) published that average super balances at retirement were $292,500 for men and $138,150 for women; and for households $355,000. Far less than $1 million,” an MLC report told us.

The magical million number is thrown around as a good goal to have to create a comfortable retirement but, as you can see, lots of Aussies are miles away from that.

Other statistics out there tell us the following:

• 81% of retirees end up on the aged care pension.

• 95% of Australians never achieve financial independence.

• 40% of Australian workers are forced into retirement before they are financially ready to retire. This is due to illness, injury and many other factors. 

• In 1945, the average Australian lived into their late 60’s early 70’s.  In 1985, the average Australian lived to their late 70’s.  Today, the average Australian lives to their late 80’s. 

A scary story from the SMH in 2016 said the average super balance for Aussies was $42,000 but that was a tale with some flaws, which the reporter, Jessica Irvine pointed out with the help of Challenger’s Jeremy Cooper.

He said: “Australians have more reasons to smile about their super balances than the average number suggests.”

As Jessica explained: “The first reason for reassurance is that the $42,000 figure is per account, not per person. There are nearly 30 million super accounts in Australia, meaning many Australians have access to more than one.

“According to the Tax Office, the average super balance – consolidated across all multiple accounts – of an Australian with super is a healthier $108,000.”

It’s better news but still not great news.

Another problem for retirement for Aussies is the fact that only 20% go to a financial planner. The industry website Professional Planner summed up a survey (Investment Trends 2015 Direct Client Report) that showed:

• Australians understand the benefits of financial advice, but many do not intend to turn to a financial planner for help.

• Three million Australians intend to conduct a financial activity without the help of an adviser in the next two years.

The first bit of news is worrying but I guess financial planners have not covered themselves in glory. And while I like the intention of three million of us to do something good for their finances sooner rather than later, I do worry about our inclination towards procrastination when it comes to money matters.

So I’m offering anyone who’ll listen the chance for me to become their money mentor. I’m asking people listening to my radio show, who would like to get richer, to send me an email to and put in the subject heading “make me rich”. I will add you to a group who I’ll send out regular tips on how to build your wealth.

If people who’d rather be richer than poorer, if they were given a choice, won’t come to me for money help, I’m happy to come to them to ensure as many Australians as possible will retire wealthier.

When it comes to getting richer, I don’t think Australians plan to fail, they simply fail to plan.

There are absolutely easy things you can do to make sure your super grows faster, that you have more to put into super or more to pay off your home loan quicker but you’ll never know unless you decide to look for some great money inside information.

So if you reckon you agree with Sophie Tucker who once said: “I’ve been rich. I’ve been poor. Rich is better” and you don’t think you can get richer by yourself, email me at and I’ll put you on my list.

Remember, you don’t get richer in a day but daily!

| More


Can the stock market rein Trump in?

Tuesday, March 06, 2018

Wall Street was up ahead of the closing bell and the reason was simple: President Donald Trump was showing signs of compromise on his tariffs on steel and aluminium. Of course, his unpredictability on any subject is again creating stock market anxiety with the retaliation threats building by the day.

And how this goes could prove critical to Malcolm Turnbull, who needs a trade war and a stock market slump like another Barnaby blow up!

So the question is: can the stock market rein in Donald Trump and his tariff tantrum?

One of my twitter followers, Darrell, made the point that Donald promised this pre-election but there is a fair argument that some election promises make more sense politically than they do economically.

There’s an old saying that says good politics is bad economics and good economics is bad politics and it certainly applies in this case. And this is a classic case of good politics giving birth to bad economics.

Getting up this morning and the Dow Jones index was up 250 points before the close and I’m not sure this is a good thing, if it makes Donald relaxed about the impact of his decision on stocks.

On the other hand, the message might already have started to sink in that if a trade war results, the stock market won’t like it. And I wonder if his popularity can stand losing his greatest supporter — Wall Street heavies — behind the cheesed off, working class Americans who thought he’d make a great President.

CNBC opened the door on optimism with the suggestion that the Donald could be wavering.

“Trump appeared to be opening the door for negotiations on tariffs,” it reported. “In a series of tweets Monday morning, Trump said: ‘Tariffs on Steel and Aluminum will only come off if a new and fair NAFTA agreement is signed,’ adding that ‘Mexico must do much more on stopping drugs from pouring into the U.S. They have not done what needs to be done.’

So let’s hope Donald is practising his famous ‘Trump: Art of the Deal’ technique which, of course, is the name of his 1987 book and again is on the best-seller list!

Another revelation gives a little confidence that this is a bargaining ploy in play, with news that the Republican’s House Speaker, Paul Ryan, is said to be “extremely worried” about the prospects of the Trump tariffs to create a global trade war.

The craziness of tariff ‘tit for tat’ encounters is shown at its worst when we learn that Europe is eyeing off Harley Davidson bikes for their get-even tariffs, along with other US products.

In the whole scheme of things, Wall Street’s reaction to his trade plan could prove crucial because the President has mid-term elections in eight months’ time. Historically, the months of May to October aren’t great for stocks compared to November to April, so if a trade war escalates in coming months, the stock market won’t like it and Wall Street will hold Donald responsible.

Clearly, the NAFTA agreement and what Mexico and Canada can give way on will determine what the President decides but, given Malcolm Turnbull’s latest Newspoll, he’ll be hoping that a trade war is averted.

The Australian economy’s improvement is his strongest card going into an election and even a party room challenge but if a tariff war derails global trade and sends the stock market down, he might not have a political leg to stand on.

This week we get a raft of important economic data from economic growth to retail figures. If you add this improving economic picture to our better reporting season, there’s good reason to be optimistic about the outlook for stocks, jobs and maybe even votes for the PM. However, a trade war could quickly turn optimism into pessimism.

In Donald we trust!


| More


Has Donald's tariffs trumped his only point of credibility?

Sunday, March 04, 2018

Just when you thought Donald Trump couldn’t do anything more to make you think “only in America!” along comes his big idea about whacking a 25% tariff on steel imports and a 10% slug on aluminium made outside the USA.

But what I can’t understand is why would he cheese off the only group who’s prepared to ignore his obvious failings as a US President and world leader — the business heavyweights that dominate Wall Street?

There’s been talk of allies like good old Oz getting an exemption but that’s purely talk coming from our homeland. Meanwhile, China and Europe are returning fire saying they’ll be loading up their protection guns with retaliatory import duties in order to get even.

And they might achieve just that, with China, for example, possibly targeting a company such as Apple, which sells a heap of products into the country.

In early February, the company announced an 11% increase in its first-quarter revenue from mainland China, Hong Kong and Taiwan to US$17.9 billion, up from US$16.2 billion in the same period a year ago.

So why is Trump going down this line? Well, he promised this foolery during his election, so at least he gets marks for keeping this promise but the economic effects (the pluses and negatives) will add up to a subtraction of benefits to the US economy and the American people.

One thing that these US TV shows (from the likes of Netflix and Apple TV) have reminded me that the operatives who work out of the White House are always respectfully talking about “the Amer1cian people”. We don’t say “the Australian people”, instead we say “Australians”, so what gives with that US nicety?

Whatever, economics says that most of the American people will lose out, even if “steel and aluminium people” gain jobs and business because of Trump’s political opportunism.

Retaliation aside from the likes of Europe and China, which is bad enough, it’s the chance that the world could engage in a trade war that could kill jobs worldwide, lower economic growth and even lead to war!

Yep, it’s no coincidence that a Great Depression, a US tariff and World War II all showed up in one decade.

So why are tariffs so bad for the economy and the people who live in it?

All manufacturers who import steel or aluminium will have higher costs. They could transfer to a local producer but costs will be higher. The US doesn’t make sheet aluminium, so they’ll keep on importing unless a new local producer comes via this tariff.

As Fairfax’s Jessica Irvine showed, there’ll be a lot of US losers. “Car, boat and plane manufacturers, medical device companies, canned goods and drinks producers and the building sector more broadly will have little choice but to pay the higher price and seek to pass on the higher cost to consumers,” she wrote over the weekend.

Yeah, but jobs will be created though they will be at the expense of sectors and workers in those areas of the economy that don’t have tariff protection. So 20,000 Apple workers could lose out to 20,000 steel workers but that’s assuming the losses and gains will be equal.

The retaliation effect could mean job losses could easily trump job gains. This whole exercise really undermines the one point I used to defend the existence of Donald Trump in a job he clearly is not suited to: the economy.

His policies of less regulation, especially in the financial area, tax cuts and infrastructure spending all gave him a tick from business leaders, most non-left economists (i.e. right-wing and balanced ones) and, of course, Wall Street.

We know that because the Dow Jones has gone up about 30% since he got the top gig. While he didn’t cause all that, he did help it substantially, along with the Fed, which has been slow to raise interest rates.

But this is another problem for tariffs — they raise prices — and when they increase the cost of steel, one of the most important inputs in a modern economy, it can add to inflation. Of course, this then makes interest rate rises even more necessary and, in part, explains why Wall Street infected our stock market last week.

When Bob Hawke and Paul Keating started cutting tariffs in the 1980s, all the vested interest groups — manufacturers and trade unions — complained. However, since 1991, we’ve had the longest ever run of economic growth for any world economy, since growth records have been officially collected (i.e. 26 years). Lowering our tariffs was crucial to that result.

For anyone worried about BlueScope Steel as a huge exporter of steel, well, it produces in the USA, so it will benefit. But who knows what retaliation brings?

One thing the economics of the past 40 years has shown me is that tariffs create opportunities for the least competitive and creates jobs in the short-term but, because there’s less competition, there’s no progress and long-term jobs are lost.

I know Trump-lovers will find excuses for his actions (such as what China does to undermine free trade) but the US President should not punish the world economy.  Instead, he should respond in a targeted way against any trade injustice by any one country.

This is a political play from the most unpopular US President in living history. At least one guy will be happy and that’s Jimmy Carter, who always gets singled out on The Simpsons as the worst US President of all time.

And don’t think I’ve always been a Trump doubter. I gave him the benefit of the doubt when I heard his acceptance speech and then I noted Wall Street leaders embraced many of his policies. But it has been downhill from there and no sensible person could buy the Trump story since then.

It’s OK if it’s a TV program up against Keeping up with the Kardashians but leading the USA is significantly more important, don’t you think?


| More



Does Trump's 'war' threat hurt stocks?

When Wall Street sneezes we catch a cold!

When should companies be pilloried in public?

Get celebrating! The stock market has almost recovered

The IMF tells us to stop worrying about our trillion dollar debt!

The pessimists on stocks are ganging up on me. Help!

Surprise! Surprise! I'm the only media type cheering wage rises!

Let's get real about this year, there will be scary hip pocket moments!

US doom 'expert' says major crash is coming. Has he put a dent in my optimism?

Politics and the economy need adults to take charge!

Stocks are up again but do normal people really care?

US inflation spikes, so why didn't Wall Street panic?

After wild Wall Street windstorms, is it safe to go back into the water?

Is the stock market fear and loathing over?

Another good day for Wall Street but can it last?

Why does Wall Street seem to be panicking again?

What are the intelligent lessons from this stock market craziness?

What you need to know about the Wall Street wobble

The Aussie share market has taken a dive, what now?

This stock market sell-off will become a buying opportunity

Don't buy 'the bad bear market' baloney, yet!

Companies report next week and I hope profits match our improving economy!

Trump proves if you've got it you don't need to flaunt it!

The Dow slumped over 600 points overnight! Should you worry?

When will the next recession and market crash happen?

Don't do it Malcolm - you have to be better than that!

Another hidden fact pointing to a strong Oz economy in 2018

Some Tightwad CEOs need to go to Disneyland

Meet the Schwarzenegger of stocks optimists and it's not me!

Killing the capital gains tax looks good on paper but...

Why does the media ignore 15 months of great jobs growth?

Our screwy stock market is a money making opportunity!

Good news! Good news! Read all about our economy!

Investors bash banks at their peril in 2018

Stocks are set for a big week and here's why this is an important one!

Strong retail figures make it Gerry Harvey 1, Amazon and the media 0

Fake news! Thank God for Germans and the Internet!

Ignore doomsday merchants and make your economy great!

US companies won't waste these tax cuts, which could delay the next recession!

Trump tax cuts mission complete! Where's the stocks surge?

Would-be bitcoin buyers must read this before punting

Should you believe the 'prophets' of doom for 2018 or are good times coming?

Could a boom and budget surplus save Malcolm Turnbull as PM?

More exciting economic news but why are our billionaires selling out?

Here's why optimists on the economy can start getting 'Big Kev' excited!

The housing boom is over but don't lose any sleep!

Here's one woman a company doesn’t want to p*ss off!

Why wouldn't this economic data make you positive for 2018?

Can Australia cut the FANG companies down to size?

Negative news makers frustrated by good economic data

Stop hating property-owning baby boomers! Homes for all are coming!

US land of the brave; Oz land of wimps!

Trump’s tax cuts passed! Could stocks fall?

We get richer on Trump tax cuts

I could punt on bitcoin but I couldn’t invest in it!

You want to meet this Trump man replacing the world’s most powerful woman!

Will Trump tax cuts and a stocks surge come this week?

Paul McCartney, me and my accurate optimism!

How dumb is Australian media giving a US retailer free publicity?

Forget our failed politicians, here’s a successful Aussie who dared to dream!

RBA boss blames low wages on tightwad bosses. I blame him!

Will tax cuts help you forget the troubled Turnbull era?

Trump, tax, Thanksgiving and our wealth – they’re related!

Longest run of job gains in 23 years! Try to be optimistic

Same sex and soccer wins good for the economy!

Is it time to panic about China and our own economy?

Two surprising threats to the Oz economy’s positive outlook

Don't be scared of a housing collapse. Fear stories about it!

Trump and the Republicans - dumb and even dumber!

The Amazon threat to our retailers is bigger than I expected!

If our dollar falls we’ll be off to the races ‘rekindling’ a great Aussie economy

On Cup Day let’s do the form on a real winner called stocks!

Saudi purge, a smart kid and the Oz economy says expect the unexpected!

Will this wog, pom, Yank witch hunt satire make us a worldwide joke?

Another property doom story. Believe it if you like to be poor!

Do we have the dopiest politicians in the world?

Stocks should track higher

Property is on the slide but don’t expect a 50% crunch as predicted by one expert!

The Kiwis are banning foreigners buying properties. Will we be next?

I don't trust the latest inflation data but I will enjoy the low interest rates they bring!

Inflation is out today. Pray that it’s on the rise!

Why Scott Morrison has to wow us today with his why!

Is home ownership all it’s cracked up to be? Yep, generally yep!

Will there be a repeat of the 1987 crash soon?

Are rich people tax bludgers? Here’s one for the rich people haters!

The market crash of 1987 – the crash I had to have!

The property lesson young people have to have!

More housing BS! But please read entire story before tweeting!

Just how bad is our household debt?

Why does super face a Dangerfield Syndrome? It gets no respect!

What you should tell your kids about getting richer

Economic shock! What I’m negative about

US job numbers look disastrously bad! But are they?

As an economic optimist, does retail worry me? A little

Love Bob Hawke but his economics on the same sex survey is crap!

Could the economy save Malcolm Turnbull? Yep, definitely yep!

When Myer's problem is that there's no reason to shop there

Will our record-breaking economy save our stocks and super?

China KO’s Kim to rescue the world economy, again!

Trump plays his get out of jail card with tax cuts for all!

Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300