Retirement incomes under a cloud

Remember the days when an employee was guaranteed a certain pension from an employer when he or she reached retirement age? You knew exactly where you stood. That all ended two decades ago, when workers found themselved faced with ‘ a new pension system, one of ‘accumulation funds, by which retirement incomes depended on what the markets and  fund managers gave you. Undefined, and sometimes messy.

The first fifteen years following the Superannuation Guarantee (SG) legislation being introduced in 1992 went well, with a compound annual rate of return provided by the share market at 15.5 per cent. The power of compound interest plus mandatory contributions starting at 3 per cent and rising to 9 per cent would have seen retirement accounts increase up to tenfold 10-fold in that period.

Things have changed, however, not least the unpredictable world economy. The market has been fruitless now for five years. After the 20 per cent correction between April 11 and August 8, the ASX 200 accumulation index (capital return plus dividends) has produced zero five-year return. And the 10-year return is not the brightest at just 6.6 per cent, while the 20-year total return is now below 10 per cent..

Added to this is the painful fact that fund managing fees now account for a much larger percentage of the long-term return.

With both the Europe (Eurozone and the UK) and the US  heavily in debt it  is unlikely that the markets will turn around soon – and as people become disillusioned with the.returns being generated by the pensions industry.there will doubtless be a marked increase in self-managed supers

If we have learned one thing over the past decade or so, it is is that there are no easy answers for funding retirement.

Prepared by Bob Woodward & Associates: offering you business consultancy, accounting, payroll administration and ancillary services in Darwin, The Northern Territory, Australia
http://www.woodwards.co/

A mixed bag for Territory economy

Commsec's State of the States report for the March quarter indicates the economic performance of the Northern Territory was again a mixed bag.

The report is produced by the Commonweaalth Bank and gives a detailed analysis of each state's economic performance based on eight key indicators.

The report shows the Northern Territory economy is being carried along by consumer spending and a strong jobs market.

Retail spending which continues to buoy the economy in the Northern Territory was 22 per cent above decade-average levels -- higher than anywhere in Australia.

Spending has been supported by the strongest employment market in Australia. The Northern Territory’ unemployment stands at only 3.1%

On the down side, the Northern Territory is the only place in Australia where construction work is not substantially higher than the decade average.

In fact, it is down 28 per cent on the ten year average. It is also two per cent lower than this time last year, says the report.

The report reveals also that the Northern Territory currently has the weakest economy in Australia when it comes to housing finance.

Another point made in the report is that population growth in the Northern Territory was the slowest in seven years.

Prepared by Bob Woodward & Associates: offering you business consultancy, accounting, payroll administration and ancillary services in Darwin, The Northern Territory, Australia
http://www.woodwards.co/

Cattle export ban lifted

The Northern Territory Cattlemen’s Association has applauded the federal government’s  decision to lift the live cattle trade suspension, but has cautioned that the cash flow crisis facing producers in the Territory may take more than a year to overcome.

The Northern Territory Cattlemen’s Association is the peak primary industry group in the Territory and represents more than 90 per cent of the region’s cattle herd.

The NTCA president, Rohan Sullivan, who has just returned from Indonesia as part of a joint NT Government and industry delegation, says the reality is that there is a great deal of work that needs to be done in Indonesia before the trade returns to some kind of normality.

Cattle numbers leaving Darwin for Indonesia will be restricted for some time, which translates to continuing financial stress for producers waiting for cattle sales – and there is no financial quick fix, says the NTCA. Live cattle exports are of critical importance to the northern pastoral industry and the northern Territory economy as a whole.

The pastoral industry is the Northern Territory’s third largest GDP earner, accounting for more than 50 per cent of the Territory’s primary production and generating over A$400 million in direct income – statistics that highlight the the type of problems that would arise with a continued ban.

With more than 220 pastoral leases, the Territory industry manages a landmass in excess of 620,000 square kilometres and a herd of over two million head. In 2010, more than 300,000 cattle were exported live through the Port of Darwin.

Prepared by Bob Woodward & Associates: offering you business consultancy, accounting, payroll administration and ancillary services in Darwin, The Northern Territory, Australia
http://www.woodwards.co/

Companies to increase hiring

A new survey from Manpower Employment indicates that 35 per cent of Northern Territory companies expect to increase hiring. Only 11 per cent plan a decrease in the number of staff taken on.

As a large proportion of the Territory workforce is transient, so employers are consistently looking to take on new  workers, says the employment company.

One of the biggest concerns facing Northern Territory employers at present is retention, it claims.

The large oil and gas projects starting up in the Territory over the next few months should help to prevent an exodus of skilled trade workers. The projects will require thousands of workers in the construction phase alone .

Unemployment in the  Northern Territory rose slightly last month, but is still only a little above 3 per cent - a level that experts consider to be, in effect, full employment.

Prepared by Bob Woodward & Associates: offering you business consultancy, accounting, payroll administration and ancillary services in Darwin, The Northern Territory, Australia
http://www.woodwards.co/

Watch out for tax scammers

A word of warning that is worth passing on. Phone and e-mail scammers claiming to be from the Australian Tax Office are offering a "A$7000 grant" in return for a A$200 payment.

During the busy tax season, scammers will try to catch people off guard using phone calls, letters, text messages, emails, bogus websites and even false job advertisements to trick people into providing their personal details and pay money.

The crooks operating the scam claim to be from the ATO or Taxation Department.They even try to appear more legitimate by providing people with a case number and a telephone number to call back on, warns the ATO

Anyone receiving these types of calls should treat them with utmost caution and not provide any personal details or money. The ATO will never ask you to pay money to receive your refund.

Reported scam attempts are investigated by the ATO and other government agencies as appropriate, including the Australian Federal Police.

The ATO has warned taxpayers also to steer clear of tax avoidance schemes as they prepare to lodge their 2011 tax returns. If you're considering entering into an arrangement that will affect your tax liabilities -- including shares, real estate or other financial products -- it's important to carefully investigate and understand the tax consequences before making your investment decision.

Prepared by Bob Woodward & Associates: offering you business consultancy, accounting, payroll administration and ancillary services in Darwin; The Northern Territory, Australia
http://www.woodwards.co/

New minimum rates of pay in July

Increases to minimum rates of pay have been introduced by Fair Work Australia, the regulatory body responsible for managing the National Minimum Wage.

Minimum weekly wages as contained in modern awards are increased by 3.4 per cent. Hourly rates of pay will be adjusted to reflect the percentage increase to weekly rates.

The increases flow on at the appropriate percentage to junior employees, employees to whom training arrangements apply, employees with disabilities and basic piece rates of pay.

The increases will apply from the first pay period commencing on or after July 1, 2011, as opposed to a singular effective date.

In effect, the national minimum wage order will be A$589.30 per week or A$15.51 per hour;

The Fair Work Australia announcement applies to all employers in the Northern Territory

Meanwhile, the Australian Chamber of Commerce and Industry has produced a fascinating document containing  the results of a survey on how employers dealt with the A$26-a-week minimum wage increase granted by Fair Work Australia in last year's review.

The national survey, which was conducted online, involved 923 small to medium Australian businesses, most of them employing fewer than a hundred staff. It shows that after last year’s rise:

65.9 per cent of employers reported decreased profitability;

54.6 per cent reported a reduction in cash flow;

39.1 per cent reported that they had reduced the total number of working hours offered to employees; and

24.2 per cent reported that they had cut the number of casual employees, while 18.6 per cent had cut back on full-time employees.

A key finding was that 44.9 per cent of employers reported a direct impact on new hiring intentions.

And 42.7 per cent of businesses owners said they were working more hours

Prepared by Bob Woodward & Associates: offering you business consultancy, accounting, payroll administration and ancillary services in Darwin; The Northern Territory, Australia
http://www.woodwards.co/

The Northern Territory defies job trends

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A private survey by the ANZ bank group shows the number of jobs being advertised fell sharply in May across most of Australia, but the Northern Territory has bucked the trend.

The ANZ job advertisement series measures the number of jobs advertised in the major daily newspapers and Internet sites covering the capital cities each month.

It has historically proved to be a very good indicator of future labour market conditions and thus, is extensively relied upon for forecasting employment growth.

The survey shows the number of job advertisements in newspapers and online in May posted their largest monthly fall in almost three years, dragged down by non-mining states.

The ANZ Job Advertisements Series shows the number of jobs on offer contracted by 6.5 per cent in the month.

The number of roles listed on the internet fell 6.7 per cent, with a smaller fall in newspaper ads.

But while New South Wales and Victoria saw some sizeable falls in newspaper job ads over the last month, they grew in the Northen Territory, as well as South Australia and the ACT.

The ANZ says it expects official employment data this week to show 14,000 jobs were added to the national workforce in May.

It is forecasting the unemployment rate could go as low as 4.7 per cent in the next few months.

Prepared by Bob Woodward & Associates: offering you business consultancy, accounting, payroll administration and ancillary services in Darwin; The Northern Territory, Australia