FINANCE

Targeted support to help cost-of-living pressures

Guy Barnett, Minister for Energy and Renewables

THE Tasmanian Government understands it’s going to be a tough winter for many Tasmanians, and in fact for all Australians, with many of the reasons for increasing electricity prices being caused by global issues outside of our control.

Here in Tasmania, we have a proven track record of helping our most vulnerable and supporting small business in tough times, and will do that again this winter.

Our COVID-19 response was the most generous per capita in Australia for individuals and businesses under stress and we have continued that targeted support through a new Winter Energy Assistance Program to help Tasmanians over the next year.

The Tasmanian Government has announced a targeted package of measures that will support Tasmanians including a $180 Winter Buster discount for Tasmania’s 94,230 eligible concession card holders costing $17 million; a boosted and expanded $50 million energy saver loan scheme for residential customers and small businesses to help families and businesses invest in energy efficiency measures to help future bill shock; no charge for aurora+ from 1 July 2022; and a $1.7 million Aurora Customer Support Fund to support residential and small business customers experiencing financial vulnerability.

Our long-held policy is for Tasmania to have the lowest, or amongst the lowest, electricity prices in the country and that is still the case today, despite the challenges being faced this year. It seems to have been largely forgotten that last year prices reduced by 7 per cent for residential and 11 per cent for small business customers.

The National Energy Market is extremely complex but we cannot afford to take kneejerk reactions that will make our future energy supply less secure and reliable. We risk our energy generators looking to take their business elsewhere, leaving our island with no way to supply increased energy needs and business growth in the future.

Instead we are responding with targeted support for Tasmanians who need it most, while providing Tasmanians with the tools to lower their energy bills and prevent bill shock.

Projects such as Marinus Link, Battery of the Nation and Green Hydrogen are front and centre in energy security, reducing carbon emissions and putting downward pressure on electricity prices.

But make no mistake, the Marinus Link deal must be a good deal for Tasmania or we won’t be supporting it.

We continue to have positive discussions with the Federal Energy Minister Chris Bowen who describes Marinus Link as a ‘key’ national transmission project.

The Tasmanian Government is focused on seeing Tasmania leverage our competitive advantages, grow our economy and keep downward pressure on energy prices and we stand ready to provide further assistance if it is needed.

Protecting your money

Damian Gibson, Financial Adviser and Partner, Elevate Wealth

THERE is no doubt that recent market volatility and high inflation have created uncertainty when it comes to retirement planning. In the current environment it is important that your financial plan is robust enough to ensure economic conditions don’t get in the way of your future prospects.

Here are some aspects to consider if you’re retired or heading towards retirement.

Futureproofing your income (and balance)

Most retirees use their superannuation to help meet their income needs in retirement. In most cases, the money inside superannuation will be invested in assets subject to volatility.

In times of economic downturn volatile assets will generally decline in value.

An incorrectly structured asset portfolio may result in the need to sell volatile assets to fund your regular income. This will lead to losses and can have a negative impact on the portfolio in the long-term

Reduce your super income stream

When your superannuation is in a pension phase you are obligated to withdraw a minimum amount per year, ranging from 4-14 per cent, depending on your age.

In 2020 the Australian Government announced a temporary 50 per cent reduction in the minimum annual amount that you must withdraw from your super income stream. This new minimum has been extended for financial year 2022/23.

If your situation allows you to draw less from your super you have the opportunity to preserve your balance during volatile times.

Boost your Centrelink

If you’re eligible, the Age Pension you receive is determined by either an asset test or income test. In both cases, if your super goes up in value, the age pension you receive might reduce.

The good news is that it also goes the other way. If your super has reduced in value over the last several months, there is a high chance you are entitled to a higher Age Pension. For this to happen, Centrelink have to be notified of the change in your super balance.

Review your risk and assets

Do you know how your super is invested? Do you know how much risk you are taking on? When you are nearing retirement or in retirement, protecting your assets becomes equally, if not more important than, chasing high returns.

It is essential that you review and understand how your money is invested and that you are comfortable with the level of risk taken on.

The past few months have been tough on super balances. Unfortunately, nobody knows when things will start improving.

Seeking professional financial advice in times like this is invaluable both to protect your money and to provide a level of certainty and direction.

Information in this article is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.

Damian Gibson