Cashback for solar panels: What you've missed this week
Suncorp offers cashback for solar power, and the ATO cracks down on undeclared foreign income.
Here are five things you might've missed this week.
Rate rises set to dent our love for property
Aussies have never been wealthier, according to the latest household wealth data from the Australian Bureau of Statistics, but that wealth comes with a lot of debt.
Net Australian household worth rose to a fresh record high of $13.43 trillion in 2Q 2021 and wealth per capita rose to a record high of $522,032.
Most of this wealth is tied up in property ($8.94 trillion), leaving Australians susceptible to interest rate increases.
Around two-thirds of household wealth is now held in bricks and mortar, compared to just 9% for direct shareholdings, a proportion which has diminished in recent times as property values have surged," says Russel Chesler, head of investments and capital markets at VanEck.
"The time is well overdue for Australian households to address this imbalance and lower their exposure to the property market and the risk of prices correcting from current record levels when interest rates rise.
Shares provide an obvious alternative to spread your wealth.
"Equities are more accessible than property and offer comparable, if not better, returns over the long term and are not as sensitive to interest rate rises," says Chesler.
Many next-generation investors are gravitating towards exchange traded funds (ETFs), which spread financial risk across a diversified share portfolio versus investing in one or two companies. ETFs are cost-effective and can be easily bought online for little or no cost, unlike the prohibitive costs of buying property."
Australian Ethical launches ethical multi-asset growth fund
Responsible investment and super fund manager Australian Ethical has rolled out one of Australia's first 100% ethical multi-asset high growth funds.
The fund, which will be open to retail investors and as an option for superannuation members, will hold up to 20% of the strategic asset allocation providing exposure to alternative assets like private equity, venture capital and infrastructure.
"This high growth, multi-asset fund allows us to invest in some of tomorrow's most innovative initiatives, and complements our enviable track record of delivering competitive returns through investing ethically in other asset classes," says John Woods, head of asset allocation at Australian Ethical.
"The most recent IPCC report made clear that decarbonising the global economy at the rate required will take a massive structural reallocation of capital to a net-zero economy combined with tremendous advances in technology. This fund enables our customers to address both by investing significantly less carbon-intensive assets while also using their money to unleash the potential of some of tomorrow's most innovative initiatives."
Suncorp Bank offers cash bonus for solar
New and existing Suncorp Bank home loan customers who have a solar power system or will have one installed in their homes by December 31, 2021, may be eligible to receive a cash bonus.
A $3000 cashback will be available for new customers signing up to an eligible Suncorp Bank home loan, while existing customers who already have a solar power system installed will qualify for $500 cashback.
"We know what's important to our customers, and we are delivering banking that is good for them and for the world," says Suncorp Bank CEO Clive van Horen.
"Not only will we continue to offer our customers more environmentally friendly banking options, the Bank has also committed to being 100% powered by renewable electricity by 2025, and to reach net zero greenhouse emissions across our operations by 2050."
Check your Velocity Global Wallet accounts
Velocity renamed its card Global Wallet in February 2021, with the name change came some new terms.
CHOICE discovered that from April 2021, any Global Wallet account with no transactions for 30 days will be charged 1.5% of the available balance every week, compared to 0.5% previously.
"CHOICE crunched the numbers and found someone with a $1000 balance on a Global Wallet product would have been charged $30 for no activity over six months before April 2021, after April the charge would be $325. In short, cardholders can be charged more than ten times more in inactivity fees," says CHOICE investigative journalist Andy Kollmorgen.
"This has come as a huge shock to the Velocity Global Wallet customers that CHOICE has heard from. Customers have had big withdrawals from their accounts that they didn't see coming," says Kollmorgen.
This came as a shock to some customers, who reported that as much as $500 were taken from their account without warning.
Under financial services laws, companies have to give customers 30 days' notice of increases in fees or charges.
"Card issuer Cuscal says it gave fair warning, but all they did was send through a confusing series of supplemental product disclosure statements. Recipients would have had to read down to the bottom of the final communication in March to discover that the inactivity fees would take a huge leap in April."
If you're a Velocity Global wallet customer and you want to avoid the inactivity fee, there are three things you can do:
1. Use the Global Wallet card to make purchases within Australia every 30 days.
2. Withdraw any remaining funds on the card.
3. Transfer the balance to an Australian bank account.
If you've lost money and want to get it back:
- Call Velocity Global Wallet on 13 18 75 (or +61 2 8667 5924 if you are outside Australia) and request that your inactivity fee charges be reimbursed.
- If the card issuer refuses to refund your money, file a complaint first with Cuscal, then with the Australian Financial Complaints Authority on the basis of not having been properly notified about the change in inactivity fees.
Don't disguise foreign income as gifts: ATO
The Australian Taxation Office (ATO) has fired a warning to Aussies who try to dress up foreign income as gifts.
Specifically, the regulator is watching out for cases where resident taxpayers fail to declare foreign income in their tax returns and then conceal the character of the funds upon repatriation to Australia, by disguising the funds received as a purported 'gift' or 'loan' from a related overseas entity.
The income could include employment or business income, interest from loans held overseas, foreign dividends, or capital gains made after selling a foreign investment.
Faking income as a gift can attract serious penalties, including criminal charges.
You can find more information here.
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