Crystal Wealth Newsroom
The election impact
You may have heard the huge sigh of relief that emanated from the Crystal Wealth offices on Saturday night as votes were counted and the election results were declared.
It was nothing to do with the political leanings of any member of our team, however.
A general election always brings with it promises of policy changes that affect different sectors of society in different ways.
And, in this instance, a large proportion of our clients would have been negatively affected by a Labor victory.
Over the past 12 months, we’ve been doing significant amounts of work, both in the background and directly with our clients, to prepare for every eventuality.
“I can’t tell you how much time we’ve spent talking to our clients over the past 12 months, about the impact the tax changes proposed by Labor would have on their position, particularly in relation to franking credits,” says John McIlroy, director at Crystal Wealth.
“We’ve worked all sorts of scenarios and had plans in place for our clients should Labor get in – we knew what we were going to do. The election result means we don’t have to execute those plans. However, we were ready to go!”
From talking to our clients since the election result, the general feeling is relief.
“It’s a relief that things aren’t changing. It’s removed a lot of uncertainty, and people are not having to make modifications to their investment programs that they are working on, because it’s almost status quo.”
“Whether you’re investing in property, have a family trust in existence, or investing in shares and getting refunds from franking credits, then you’ll likely have a sense of relief,” says McIlroy.
The outlook for property investors
The coalition victory should also see more stability across the financial markets, and already we’ve seen APRA relaxing mortgage lending criteria and the RBA indicating an interest rate cut in June – both of which should add an element of buoyancy to the property market. “We may not have hit the bottom of the residential property market but these changes will be positive”.
“Apart from opposing the capital gains tax changes and negative gearing, the Liberal party didn’t really have a policy that was promoting property in any great way, apart from a policy that will help some first home buyers.
“That said, the stability and status quo should help the property market, and we’re already seeing the impact of that stability, with the loosening of credit regulation, and a prospective interest rate cut.”
The next 12 months
Overall, we’re in a position of status quo, and the economic stability should give greater confidence across investment sectors – as reflected in the share market in the immediate aftermath of the election.
And, while plans to move share portfolios and investments around didn’t eventuate this time around, it just goes to illustrate the benefits of working with an expert team who can prepare and leap into action, if and when necessary.