Aussies to spend $500 during Black Friday sales

Black Friday bargain hunters to spend average of $500, one in seven first homebuyers use 5% deposit scheme, and dud super funds game the system. Here are five things you may have missed this week.

Shoppers to spend average of $500 this Black Friday

Ready, set, spend! Black Friday/Cyber Monday is upon us, and Australians are expected to spend an average of $500 over the four day bargain bonanza according to Savvy research.

Savvy says clothing, electronics, beauty products and toys top the shopping lists of consumers this Black Friday.

While two out of five of us will use the weekend to stock up on festive gifts, a Commonwealth Bank survey found seven in 10 Black Friday shoppers will buy everyday essentials or big ticket items for themselves.

Consumer group CHOICE offers a few tips to be sure you're paying a rock bottom price:

• Follow retailers or brands on social media, for price announcements
• Check out websites such as Google Shopping
• Use price comparison apps like Shopular, ShopSavvy and BuyVia.

One in seven first home buyers rely on government guarantee

A growing number of first home buyers are relying on the First Home Guarantee (FHG) that makes it possible to buy a home with just 5% deposit and zero lenders mortgage insurance thanks to the government guaranteeing the remaining 15%.

The latest data from NHFIC, the body that runs the FHG, shows one in seven first home buyers

were supported by a Government guarantee in 2021-22, up from around one in 10 the previous financial year. In Queensland, one in five first home buyers relied on the scheme.

NHFIC says nearly half of all first home buyers using the scheme purchased homes that were more than 25 years old, and around 18% cheaper on average than newly constructed homes.

Dud super funds game the system

Industry Super Australia (ISA) says dud super funds manipulate fees and reclassify investment assets  in order to pass the MySuper performance test conducted annually by regulator APRA.

Prior to APRA's inaugural 2021 MySuper tests, ISA says 35 funds reclassified investments. Many reduced exposures to 'Other' assets with a higher 5.1% return benchmark while increasing exposure to the lower benchmarked fixed income (1.8%) asset class or cash.

There may be legitimate reasons for funds to change asset allocations, however ISA says the result was that funds boosted their test score without increasing returns to members.

ISA deputy chief executive Matt Linden, says, "Performance testing is a good thing, but to unlock its full potential funds should be measured on what value they are adding to their members' retirements - not how they can game the system.

He notes that some funds did cut fees to pass APRA's MySuper test, but adds, "This assessment has allowed too many dud funds to bend the rules, so they pass, leaving their members with the same lousy returns and high fees."

Payday loans most stressful type of debt

NAB is warning against the dangers of payday loans, as more Aussies turn to 'quick fix' lending to deal with rising living costs.

According to NAB research, one in 10 Australians facing financial hardship have accessed a payday loan in the past three months.

Payday loans let you borrow up to $2000, with full repayment due within 16 days to one year.

The catch of payday loans is that they typically come stacked with fees. MoneySmart says that a payday loan of $2,000 repaid over one year, can cost a total of $3360 to pay down - $1360 more than the initial borrowing.

Not surprisingly, NAB says payday loans are the most stress-inducing of all debt for Australians. Yet they are the third most common type of debt used to manage financial hardship, behind credit cards and borrowing from friends and family.

NAB head of customer vulnerability, Mike Chambers, recommends getting in touch with your bank rather than signing up for a payday loan.

"No matter how bad a situation may seem, there is help available. Around 97% of customers who contact us early when faced with financial difficulty, recover within 90 days," Chambers says.

D-day for directors is fast approaching

If you're a company director you need to sign up for your unique 15-digit 'director ID' by 30 November or face penalties of up to $13,000.

Director ID is a new step being introduced to combat so-called 'dummy directors', who can be behind a company that collapses leaving a trail of money owing, only to re-establish as a different entity later on.

The Australian Taxation Office says over 1.4 million directors have applied for their director ID, but with an estimated 2.5 million directors across Australia, around one million directors still need to apply.

Australian Business Registry Services (ABRS) Deputy Registrar Karen Foat says, "Some people might not actually realise they are a director of a company.

"You don't have to wear a suit or work in an office to be considered a director. If you run a small business, self-managed super fund, a not-for-profit or even a large sporting club, you may be a director, which means you'll need a director ID."

The fastest way to apply is online at abrs.gov.au, which will issue a director ID instantly once the application is complete.

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