The new financial year starts tomorrow, and that means changes for individuals and businesses. The lowest personal income tax rate drops from 16 per cent to 15 per cent for income levels between $18,201 and $45,000. Next year that rate will drop to 14 per cent.

A new $1,000 standard deduction for work-related expenses takes effect tomorrow (for when you do your tax next year), while the instant asset write off for small business will be permanent from tomorrow.

Business loss carry back returns kick in. If a business makes a loss in a financial year, they can claim a refund on the tax paid in the previous two income years.

The national minimum wage will increase by six per cent, while workers on modern award wages will get a 4.5 per cent increase. That pushes the minimum wage above $1,000 a week.

And superannuation will start being paid at the same time as wages, under the new super payday changes. It might mean a cash flow crunch for some businesses, but it should help ensure super is paid to workers. Also super balances over $3 million will face increased tax liabilities, while the amount you can put away in super each year and still receive concessional tax treatment increases from $30,000 to $32,500.

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Greed-o-meter

Who's really doing all the work in federal parliament? One way to see who's doing the heavy lifting is to compare the number of speeches made - and last week, it was Labor Senator Katy Gallagher and Liberal Senator Claire Chandler. Despite dominating the news headlines, One Nation were a lot quieter in parliament with none of their members cracking the top ten list, according to checkhansard.com. The party's four senators made 19 speeches between them - about 2% of everything said in Parliament across the four sitting days. Pauline Hanson was One Nation's busiest contributor with nine speeches, but that left her around 14th overall. "Housing" was the word of the week and was mentioned in 181 of the 954 speeches delivered.

Source: checkhansard.com

Fear & Greed Q+A today

On whether the AI investment boom is starting to crack, and what it all means for Australian investors:

 

“If you wanted to play AI hardware and memory chips in Australia, I'd dare say people don't play them strictly through Goodman and NextDC, although they should be the best candidates.

 

I think people are actually doing that through the resources companies because they're looking at copper and the requirements for copper to build out all these data centres, all this infrastructure and electrification.

 

Personally, I think that's very dangerous because it's not exactly the same thing. But that's what people have been doing.

 

If you're sitting there as Kevin Warsh or you're sitting there at the RBA asking yourself whether AI spending is inflationary or disinflationary, I'd actually be looking front and centre at what's happening with copper prices.”

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News in brief

The Aussie dollar has slipped below 69 US cents, as the greenback strengthens amid growing expectations that interest rates in the US will rise later in the year. Gold is trading around $US4,000 an ounce while Brent crude is fetching $US72 a barrel. Bitcoin has fallen below $US60,000 a token, having halved since October last year.

Australia and Vanuatu yesterday signed the Nakamal security treaty after months of negotiations, in a deal which will make Australia the Pacific nation’s largest economic, security and development partner.

Nine Entertainment and Foxtel look set to win the broadcast rights to the National Rugby League, paying $700 million per year, over seven years in the biggest sporting deal ever.

The US and Iran have agreed to stop attacking each other before peace talks resume this week over the Strait of Hormuz and other issues.

Volkswagen plans to cut up to 100,000 jobs and end production at four plants in Germany as Europe’s largest carmaker seeks to counter the rapid advance of Chinese rivals.

Fear-o-meter

Westpac’s Richard Franulovich on the Aussie dollar:

After four straight weeks lower, the Australian dollar remains heavy and listless, parked around 0.6900 and still stuck in a funk, of sorts. The domestic rates narrative has flipped - RBA hike expectations have been mostly stripped out and markets are now toying with cuts into 2027.

That’s a stark contrast to the US, where resilient data and a hawkish Fed under new Chair Warsh keep hikes in play. Geopolitics aren’t helping either. The US‑Iran ceasefire is fraying, with both sides continuing to strike even as talks drag on, limiting any sustained reopening of Hormuz flows. That’s hardly a supportive backdrop for a growth‑sensitive currency like AUD.

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