The major changes that started on 1 July are:
- Additional 15% tax on Superannuation balances above $3 million.
- Transfer balance cap for new Pension Accounts increased to $2.1m.
- Concessional (Tax deductible) Superannuation Contributions limit increases to $32,500.
- Non-concessional limit increases to $130,000.
All Ordinaries (Australian Shares) Index – 12 months to 1 July 2026
Market Returns to 30 June 2026
Market Commentary
It has been a volatile year for investment markets. We suffered 2 big drops with the war in Iran causing a significant amount of concern. Real Estate and Fixed Interest (Government Bonds) have performed poorly due to pressure on interest rates.
Despite this, most people have ended the year with a reasonable return due to good returns from International shares.
International shares have been the best performing asset class over every time period, for the last 10 years. It is important to have a significant exposure to International shares but also to remain well diversified as this position could easily reverse in the future.
US based companies represent 73.8% of the International Shares Index and all of the ten largest global companies are US based. Given this, the index’s performance is heavily dependent on these companies.
We are continually looking for ways to manage risk and ensure that returns are as consistent as possible over time.
Australian Economy
We have been experiencing a supply shock with high oil prices over the last 3 months. The temporary reduction in the fuel excise tax helped absorb part of that shock but the tax rate is slated to return back to normal in August.
Apparently, the Strait of Hormuz is currently open again and as a result, oil prices have been falling. They are now only around 10% higher than they were 6-12 months ago.
The CPI inflation rate is currently at 4.0%. The rate might not fall much in the near future so the Reserve Bank will continue to be under pressure to increase interest rates.
The unemployment rate is currently 4.4% and GDP growth is 2.5%. These figures indicate a relatively stable economy but that can change suddenly.
Changes to Capital Gains Tax, Negative Gearing and SMSF rules have made property investment less attractive. This has introduced a lot of uncertainty into Residential Real Estate markets as there are less people buying properties.
Auction clearance rates have fallen and prices are also falling. This is meant to give first home buyers a better chance at buying property but we will have to wait to see how effective it is.
There is always a chance that rules will change again in future but for most people the impact is likely to be small.
US Economy
Recent figures from the US are showing that Inflation is at 4.2%, economic growth is at 2.1% and unemployment is at 4.2%. These figures are all similar to Australia’s.
The main difference is that their official interest rate is set at a range of 3.50% to 3.75% which is significantly less than our official interest rate of 4.35%.
The US economy has been buoyed by large investments into AI systems and Data Centres. It is likely that those investments will reduce at some point. They have also been holding the FIFA World Cup which could be a big boost to tourism.
The main problem for the US at the moment is political instability and a large budget deficit. At some point they will need to bring their budget into surplus but the current political environment doesn’t allow for it.