September Newsletter

CONNECT September 2012 ISSUE

Chartered Accountants, Financial & Business Advisers

Writing our next chapter Powers Financial Group is a Biloela institution with a mind for improvement. To signify the beginning of another successful chapter, we have moved offices and can now be found at 54 Callide St. Founded in 1968, Powers Financial Group is Biloela’s premier accounting and financial services provider. Since opening our doors, we have enjoyed the satisfaction of aiding the success of our clients, continually seeking to exceed all expectations.

To better meet the needs and expectations of our clients, we have relocated our head office to more modern offices in what was formerly the historic Broadway Theatre in Callide St.

IN THIS ISSUE...

The theatre has played a significant role in the community since opening in 1925.

From film to furniture, it has provided the perfect home for many success stories throughout Biloela’s history.

In a sense, we are returning home - Trevor and Warwick Power began providing professional accounting services last century in Callide Street.

In our new location, Powers looks forward to further enhancing our services of taxation, superannuation,

agribusiness, investment, finance and business consulting. The new office will emphasize that we are more than just an accounting firm - transforming Powers Chartered Accountants into Powers Financial Group.

We are now writing the next chapter in its growth and service to Biloela and the wider Central Queensland region, and the newest chapter in the history of the majestic Broadway Theatre building.

•W riting our next chapter

•L andholders and mining exploration

•P lanning with Self-Managed Super Funds

•T his is 40: Planning at the cross-roads

•F ixed interest rates

•L uxury Car Tax Rebate

•D ad and Partner Pay

•P lanning with investment

• I n-House announcements

Powers can now be found on social media. “Like” our page on Facebook and follow us on Twitter to get real-time updates on tax, business and finance.

Landholders and mining exploration negotiation A recent decision in the Land Court has left one Central Queensland family of landholders wishing they had sought advice before signing up for mining exploration.

The Land Court has made a discouragingly low award of compensation to a Central Queensland landholding family affected by a 12- day coal exploration program involving four drill pads and approximately six kilometres of access tracks on their 15,000 hectare property.

The decision, Peabody West Burton Pty Ltd v Mason, serves as a reminder that landholders should consider all issues when negotiating conduct and compensation agreements for resource exploration activities, of which the amount of upfront compensation is rarely the most important.

The land access laws require that resource companies attempt to negotiate a conduct and compensation agreement with affected landholders before entering private land to carry out “advanced” exploration activities such as drilling of exploration holes or surveys that involve significant disturbance. The alternative to reaching agreement is a determination of compensation by the Land Court.

The appropriate time for such a claim is when the mining company applies for a mining lease that authorises production.

In the context of coal seam gas projects, the Court’s approach suggests

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that landholders cannot claim at the exploration stage a decline in value based on the chance of a future gas field development, but instead have to wait until a gas field is actually proposed.

This demonstrates the need to ensure any agreement for exploration activities allows a landholder to maximise a compensation claim once mining or gas production is proposed.

The benefits of doing so will usually far outweigh the potential benefits of taking a dispute about compensation for exploration activities to the Land Court. Resource companies are already taking a more aggressive approach in negotiations about compensation for exploration activities.

Many landholders continue to sign conduct and compensation agreements presented by resource companies without seeking any professional advice.

We encourage our clients to urge their neighbours and friends in the industry to seek advice before signing any document presented by a resource company. Powers Accountants have years of experience in dealing with such negotiations, know the tax issues and can refer you to specialist lawyers in this area. Contact us (07) 4995 6677.

Planning with Self-Managed Super Funds “Sir, you have disappointed us! Go out and govern NSW ” So wrote English Poet Hilaire Belloc in 1907 in his book of Poems - Cautionary Tales. Even then the thought of being sent to NSW was seen as failing. Little may have changed so take the opportunity now to avoid this fate!

Planning for your future is taking charge of your circumstances. We all have superannuation just as we pay tax and as we will die.

You owe it to yourself and your forebearers to make the best use of your super. You must be careful to avoid the Government’s excess contribution tax. You could:

• u se your superannuation to own your life insurance

•w ith a self managed fund you

can borrow money to acquire an asset.

•w hen it comes to retirement you can pay no tax whilst living on your pension investment income.

Please I say to you when thinking of your future, avoid having to govern NSW. It was rotten in 1907 and in 2012 is no better.

Discuss a Self-Managed Super Fund, with Super Director Charles Page (07) 3251 4444

This is 40: Planning at the cross-roads Powers director Geoff Arnold recently turned forty, and to celebrate he took inventory as accountants do. He reflects on steps taken to ensure aspirations and goals can be met.

As I approached 40 earlier in the year, I was given plenty of advice. Most of it could be summed up in one sentence. ”Just forget about it and pretend it’s not happening”. The danger with this head-inthe-sand approach is that we don’t use the milestone to reflect on our life’s aspirations and goals – particularly those financial in nature.

In theory, the forties represent a time of established careers, strong earning capacity and being well on the way to reaching long-term saving goals.

Unfortunately, life often gets in the way of theory.

A milestone such as turning 40 is a great opportunity to take a step back from the hustle and bustle of hectic family schedules and make sure we are still heading in the right direction. Below is a list of financial objectives we should be aiming to achieve by age 40.

• Have adequate insurance – nobody is safe from the clutches of uncertainty.

• Control your debts – having debts

shouldn’t be an excuse for not being able to handle your finances.

• Understanding your cashflow –

preparing budgets allows you to meet your commitments as well as put money away using savings or superannuation plans.

•S eek advice – it is hard to make

decisions, if you don’t know what your options are.

Obviously some people will be more advanced than others for each of these attributes, but that is not the point. It is never too late. Better to start now, than never start at all.

Financial independence and security shouldn’t be taken for granted. It is something that is achieved through goal setting, constant monitoring and in most cases hard work and sacrifices.

Turning 40 shouldn’t be something that we try to forget, but rather it should be a time to remember. Remember what it is that we are working towards, what our goals and ambitions are, and to reflect on whether we are making the right financial choices to make future dreams a reality.

In reality we spend so much of our time living and planning day to day, week to week that our financial goals from month to month and year to year are constantly ambushed by issues that we consider “more urgent”. Ironically, many of these “urgent issues”, really just represent fish and chip wrapping in the overall scheme of life.

• Think about your “magic number” – this

Are your rates locked in?

Luxury Car Tax (LCT) refund

Dad and Partner Pay

Banks are out to lend money at the moment, is it time to lock in your rate?

You may be missing a rebate on your luxury car.

New legislation is extending the Federal Government’s national Paid Parental Leave.

Some banks are advertising 3 year fixed rates as low as 5.74%.

This is below the advertised standard variable rate of many banks. If you are looking for peace of mind on your loan repayments, now is a good time to think about fixing a rate.

It is important you seek advice in relation to your circumstances and goals, as there can be significant break costs if you need to make variations or make substantial lump sum debt reductions to the loan during the fixed rate period.

For advice contact Dan McMillan, Mortgage Consultant at Powers on (07) 4995 6677.

effectively represents a number you will need for your retirement.

A Luxury Car Tax (LCT) of 33% applies to most vehicles over the LCT threshold which is $59,133 for the 2012-13 financial year.

Most primary producers and tourist operators can claim refunds of 8/33 of the LCT they have borne, up to a maximum of $3,000. This is the difference between the current LCT rate of 33% and the previous LCT rate of 25%.

This applies to 4WD vehicles purchased since the 2007-08 financial year.

To discuss eligibility, contact your Powers Accountant on (07) 4995 6677 (Biloela) or (07) 3251 4444 (Brisbane).

Dad and Partner Pay (D&PP) will be available to an eligible father or partner, who is caring for a child born or adopted after 1 January 2013. Eligible fathers and partners will be able to receive 2 weeks’ pay at the prevailing national minimum wage, currently $606.40 before tax.

You must be an Australian resident and show you have worked continuously for at least 10 of the last 13 months (totalling at least 330 hours) before the child’s birth or adoption and have earned no more than $150,000 in the previous financial year.

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Planning with investment Economic fears may run deep, but shares may be set to improve as Powers’ newest team member Warwick French explains After several years of poor performance, shares are exhibiting good value, particularly against record low bond yields and low and falling cash rates. Against this, the investment backdrop remains as messy as it’s ever been over the past few years.

Europe is continuing to muddle along with many fretting it will blow apart. The US is going through a soft patch with concerns about a ‘fiscal cliff’ later this year. Key emerging countries have also slowed.

Recent announcements of major monetary easing initiatives by the Euro and USA Governments have given markets a positive lift, because this time those Governments have not placed a limit on how much money they will inject into their economies.

Their money printing presses are rolling again, which has given the world share markets renewed confidence in the last week. One well known Brisbane stockbroker recently made the call that While the Australian economy is doing better than many, the share market seems to be exposed to parts of the economy that aren’t doing well. As disappointment piles on disappointment and the years roll by it is no surprise investors are starting to give up and focus on preserving capital as opposed to seeking growth.

Given this, is the “stocks for the long term” approach still valid? Are long term investors right to sit tight? History is on the side of shares It is well known that over very long periods of time, shares

have provided superior returns to most alternatives such as cash or bonds, since 1900, Australian shares have returned nearly 12%p.a. compared to 6%p.a. for bonds and 4.8%p.a. for cash.

The problem is that the current volatility has spooked the market and investors nerves are overly frazelled! The result is that investor portfolio’s are overflowing with cash!

In-House Announcements New additions to Powers’ Team Powers are pleased to welcome Warwick French and Jason Webster to Powers Financial Group.

Warwick joins Powers Investment & Finance Services, bringing with him years of experience in investment advisory services.

have fallen to their lowest levels in years.

Jason joins Powers Agribusiness as a Rural Finance Consultant. Born and bred on a cattle, sheep and cropping property, Jason’s experience creates a substantial addition to our client services.

and stock levels are low.

Our first annual retreat

So looking forward to the year ahead how are you going to invest? Things to contemplate:

•C ash, Term Deposit and Bond Yields

•O ption clearances are still around 50%

•P roperty prices are not looking at going

forward any time soon.

•S hare valuations are well below their fair value.

•S hare Yields are now higher than term deposits.

We are not saying that you need to bet the farm on the share market recovering but you may want to talk to us about our “new” Diversified Direct approach to investing.

All Powers staff recently completed our first retreat. Taking place in Hervey Bay, we came together under one roof to discuss how we can continue to provide the highest level of service to you, our clients. The weekend could only be described as a huge success as we move forward with a clear vision for the future.

Birthdays Marc McMahon 50th

Our aim is to increase yields whilst still participating in any upside. The other benefit is that it also reduces fees by up to 1% p.a, meaning more money in your pocket.

Contact Warwick to discuss investment in the share market on (07) 3251 4411.

Contact us

For further information on any of the articles in this issue contact your local office: BILOELA 54 Callide Street (PO Box 98) Biloela QLD 4715 P 07 4995 6677 F 07 4992 1787 8.30am — 5.00pm

BRISBANE L7, 269 Wickham Street (PO Box 310) Fortitude Valley QLD 4006 P 07 3251 4444 F 07 3251 4422 8.30am — 5.00pm

www.powers.net.au

MONTO 3 Newton Street (PO Box 69) Monto QLD 4630 P 07 4166 1366 F 07 4166 1343 9.00am — 3.00pm

mail@powers.net.au

The information in this document is of a general nature and is provided for information purposes only. It does not take into account your particular objectives, financial situation or needs and should not be used as a substitute for independent advice from a qualified professional.

Liability limited by a scheme approved under Professional Standards Legislation, except where financial services are provided by Authorised Representatives of Professional Investment Services Pty Ltd (PIS) AFSL 234951 ABN 11 074 608 558.

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