Correspondence: Budget numbers and super strategies

The truth behind the budget numbers

I really enjoyed Adam Carr’s recent piece, The budget bottom line. What a great article, which very clearly (and simply) shows the truth in the budget numbers. Revenue is not the problem, spending is the issue. Great work.

Name withheld

Superannuation strategy and tax-free income

In his article, Review your superannuation strategy, Robert Gottliebsen seems to suggest that Labor's plan to limit tax-free income in a fund to $100,000 is now in effect. As far as I’m aware this legislation hasn’t yet passed.

Name withheld

Hi Robert, I am a great fan. You always put a sensible focus on the issues. It is very unfortunate that we don't seem to get as much from you and Alan as under the old ownership.

I believe that you may not be correct in your comments on tax in pension phase in your article, Review your superannuation strategy. The $100,000 tax free limit in pension phase has not been legislated and because of complexity probably never will. Continue the good work.

Bruce Cleary

PS I am a 66 year old SMSF investor based in Singapore and rely on your articles to give me a "real" view of Australian issues.

Robert’s response: Thank you for your letters, you both make a good point. I will make the qualification on this next week.

Small Ords Index

Could Brendon Lau please explain how I can buy into the small ords index? And thanks for the great articles.

Name Withheld

Brendon’s response: Thanks for your letter. One of the easiest ways for retail investors to gain exposure to small caps is through exchange-traded funds (ETFs) such as the iShares S&P ASX Small Ordinaries (ISO) and the Vanguard MSCI Australian Small Companies Index ETF (VSO), although I would advise consulting with a financial adviser before making any investment decisions.

Alex Waislitz

I read with interest Alan Kohler's comments on Alex Waislitz in his recent weekend briefing, Kohler’s Week: Ben, Jim, Glenn, Lou, Alex. I have not been able to find any information on the investment fund he plans to set up. Do you know where I might be able to keep up with any news on this?

PC

Editor’s response: Thanks for your letter. Alex Waislitz is expected to launch the fund later this year through a listed company Wentworth Holdings (WWM). You can see updated company information on Wentworth Holdings on the ASX website or on the company's own website, although I don’t believe there have been any further announcements on this launch just yet.

Inflation expectations

As we all know, term deposits are becoming increasingly unattractive from a yield perspective. I believe this argument is much stronger when real inflation rates are taken into account. While the official rate is below 2.5%, mine is a lot higher. I understand that the basket of goods has been changed a number of times, maybe with the objective to show low inflation rates. I would be interested in some research about the real rate of inflation which higher net worth individuals are exposed to, where for example restaurant costs, hotels etc. make up a higher share of expenditure.

SG

Newcrest Mining exits Canada

I’m curious to know what Eureka Report’s view is on Newcrest Mining (NCM) following the news that it plans to delist from the Canadian stock exchange. It sounds disastrous to me.

Name withheld

Editor’s response: Newcrest has had a tough few months and are really looking to cut costs, hence the delisting. We’ll have to wait to see what kind of an impact this will have. Ian Verrender wrote a very astute piece on the miner’s latest result that you may find of interest. (See Newcrest’s record loss doesn’t clear the decks).