Budget 2020/21 – Recovery Mode

What a difference a year makes. Okay, technically it’s been 18 months since the last Federal budget, but let’s not split hairs.  The contrast between Treasurer Josh Frydenberg’s “Back in Black” budget of April 2019 and last night’s “Road to Recovery” version could not have been greater.

Of course the reason the Budget was delayed six months was due to the absolute pandemonium that befell Australia in March this year, just as Treasury would normally have been putting the finishing touches on another budgetary process.

Instead it was all hands on deck, as COVID-19 effectively brought Australia’s economy to a standstill. The Government’s response, which we outlined back in March, was swift and significant, with a range of measures that no doubt averted financial disaster for many.

As this goes to print, over three million Australians remain on JobKeeper, the wage subsidy programme that has allowed many to retain a connection to employment, however tenuous that might currently be. Some one million others aren’t as fortunate, now relying on JobSeeker and the Coronavirus supplement, the key social security measures directed at jobless individuals.

With the JobKeeper rate recently reduced, and its end scheduled for early next year, this Budget’s focus is clearly on getting Australians back into jobs.  

To do that, the jobs will first have to return. This Budget contains a range of measures designed to encourage businesses to hire new employees.  It also contains individual tax cuts that the government hopes will be spent rather than saved.

To find out about which bits of Budget 2020/21 will impact you, read on…

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Clover FY 2020 Investment Year in Review

Image: Shutterstock

Key Take-outs:

  • One of the most volatile six months in share market history came to a close with markets here and overseas recovering much of the dramatic falls of February-March.
  • The turnaround was nothing short of breathtaking, with the Aussie S&P/ASX200 index posting a 16.5% rise between April and June, while the US S&P 500 index rose 20.5%.
  • While not erasing the Feb-March falls in full, the rebound in equity markets has helped diversified portfolios to close out the financial year in reasonable shape.
  • Equity markets continue to be supported by policies implemented by many countries to limit the economic fallout from the COVID-19 pandemic.
  • If there is one investing lesson to take away from the madness of 2020 so far it is this: the less you play with your portfolio, the less likely you are to get played by it.

Another financial year comes to a close. It’s a safe bet, however, that history won’t judge 2019/20 as ‘just another financial year’. It could not have been more atypical. At least not the second half of it, where COVID-19 completely overtook any and all plans for 2020.  

Yet even amid the chaos and confusion of the past six months there remains reason for optimism. For the preservation of hopes and dreams. For a future beyond the current coronavirus-induced malaise.

Continue reading “Clover FY 2020 Investment Year in Review”