Annual wrap for 2022 and predictions for 2023

THE MORRISSEY EXCHANGE, SHAW AND PARTNERS: ANNUAL WRAP FOR 2022, PREDICTIONS FOR 2023

This is the final pod for the year before you all disappear for a month, so you can listen as you tan yourselves.

This pod runs through our predictions from December last year, how we fared, and why. We then look forward to 2023 and what is to become of so many important global and local issues.

Thank you for listening through the year, and we look forward to providing you with further topical discussions in 2023.

Moz Afzal - The Global View, Part 2

The Morrissey Exchange, Shaw and Partners: Moz Afzal - The Global View, Part 2

In today’s podcast, Ben Morrissey continues his interview with Mr Moz Afzal, EFGAM’s Senior PM and Global CIO.

In this episode we explore; China and their long term goals, the learnings for Western society from recent political developments, battery metals, cryptocurrencies, Moz’s key picks for growth, and where he would invest $100k if he couldn’t get access to it for 10 years.

Enjoy a part 2 that makes Lethal Weapon 2 seem pedestrian.

Director ID and How to Apply

New Director ID Requirement for Directors

From 1st November 2021 Company directors need to verify their identity as part of a new director identification number.

(Director ID) requirement by ASIC. A director ID is a unique identifier that a director will apply for once and keep forever.

All Australian company directors have until 30 November 2022 to apply for a Director ID (This also applies to Company Trustees of Self-Managed Super Funds).

Moz Afzal - The Global View, Part 1

The Morrissey Exchange, Shaw and Partners: Moz Afzal - The Global View, Part 1

In today’s podcast, Ben Morrissey interviews Mr Moz Afzal, EFGAM’s Senior PM and Global CIO.

We’re extremely fortunate to pick the brain of such an informed and well-connected economic talent; one of his role’s would be insanely demanding, let alone contending with both.

For those who don’t know, EFG is a global private banking and asset management group headquartered in Zurich and listed on the Swiss Stock Exchange. EFG operates in around 40 locations worldwide with 3000 employees, boasts $260 billion funds under management, but most importantly, to them of course, is they are Shaw & Partner’s Global partner.

We cover a lot here, hence the two parts.

In this episode we discuss Moz’s expectations for a number of the major global economies, international ideologies, War and the potential outcomes in Ukraine, the Euro and whether it will last, political leaders, and so on.

Moz was a particularly endearing sort of fella, and has that rare gift of simplifying complicated issues.

So grab a decaffeinated extra hot almond caramel macchiato and enjoy the musings of a wise soul.

Shaw and Partners Foundation

Last weekend, the Adelaide Shaw and Partners crew completed the ‘Bloody Long Walk’ to raise money for the Mito Foundation.

The Mito Foundation supports people affected by mitochondrial disease (mito), funds essential for research into the prevention, diagnosis, treatment and cures of mitochondrial disorders, and increases awareness and education about this devastating disease.

Suzie from the Adelaide office lost her daughter to this horrendous disease and she and her team decided to do something about it; nor for herself, but for others who find themselves in a similar predicament.

Suzie raised $28,933 individually and Shaw and Partners’ staff managed to raise $43,891.

Click on the link to Suzie and her daughter Dot’s story below.

Budget 2022

Personal Income Tax

  •  No changes to the currently legislated personal income tax arrangements. Stage three tax cuts for 2024 will still come into effect, the 37% marginal rate for those earning over $120,000 will be eliminated. For those earning between $45,000 and $200,000, the 32.5% tax rate will decline to 30%. The top tax bracket (45%) will now apply at $200,000, not $180,000.

  • The $1,500 LMITO (Low and Middle income tax offset) has been allowed to lapse. This was a $1,500 tax rebate for those on incomes up to $126,000 and was introduced back in 2018.

Superannuation – Expanded eligibility for Downsizer contributions

The Government will allow more people to make downsizer contributions to their superannuation, by reducing the minimum eligibility age from 60 to 55 years of age. The measure will have effect from the start of the first quarter after Royal Assent of the enabling legislation. This was a pre-election announcement.

The downsizer contribution allows people to make a one-off post-tax contribution to their superannuation of up to $300,000 per person from the proceeds of selling their home. Both members of a couple can contribute, and contributions do not count towards non-concessional contribution caps.

Social Security

  • Lifting the income threshold for the Commonwealth Seniors Health card from $61,284 to $90,000 for singles and from $98,054 to $144,000 (combined) for couples.

  • Cheaper childcare.

  • Paid parental scheme to have greater flexibility for families from 1 July 2023.

Infrastructure

$9.6 billion toward several nationally significant infrastructure projects including:

  • Freight highway upgrades: $1.5 billion allocated for upgrading important highways that facilitate freight including the Tanami, Dukes, and Augusta highways, among others.

  • Suburban Rail Link in Victoria: $2.2 billion for the rail system that will connect every major rail line (and the airport) together in Victoria.

  • Electrification of public transport in WA: $670 million to manufacture more electric powered buses and battery charging technology in WA.

  • Western Sydney roads: $300 million for the development of road linkages in Western Sydney to foster efficient travel of passengers and freight before the new airport opens in 2026.

  • NBN: A $2.4 billion investment into the NBN to extend the network to 1.5 million more homes.

Electric cars

The Government will cut taxes on electric cars so that more Australians are able to afford them.

From 1 July 2022, the measure will exempt battery, hydrogen fuel cell and plug-in hybrid electric cars from fringe benefits tax and import tariffs if they have a first retail price below the luxury car tax threshold for fuel-efficient cars ($84,916 in 2022‑23). The car must not have been held or used before 1 July 2022.

Employers will need to include exempt electric car fringe benefits in an employee’s reportable fringe benefits amount.

Share buybacks

The decision to scrap the off-market buyback is not all that surprising.

Large companies that possess significant surplus franking credits would offer to buy back investors’ stock. The breakdown of the off-market buybacks were of the total amount paid to the shareholder, an artificially low capital component (which was well and truly picked up by the tax department and modified accordingly) and an inflated dividend component which enabled the distribution of the excess franking credits.

Well, no more.

It was a smart strategy when originally devised some years back, but much of the juice was squeezed out by the ATO when they tinkered with it, rendering it attractive to non-tax paying and low tax paying entities, at best.

It will impact Whitehaven’s (WHC) current capital management initiatives who were conducting both an on market and an off market buyback and will see them most likely paying large special dividends instead of the off market component.

Carbonxt - Cleaning Up

The Morrissey Exchange, Shaw and Partners: Carbonxt - Cleaning Up

In today’s podcast, Ben Morrissey interviews Mr Warren Murphy, CEO Carbonxt (CG1) for a second time, where we discuss the company as a whole but zero in on their recently announced deal.

CG1 is a rapidly expanding clean tech business located in the US. It started life as a company solely focused on using their patented Activated Carbon(AC) technology to remove mercury from the smokestacks in coal fired power plants. They now lead the world in the development of AC products aimed at capturing all manner of contaminants released in industrial processes via industrial air purification, wastewater treatment, etc.

CG1 has signed terms sheets for the establishment and financing of a 40% stake in a state-of-the-art activated carbon plant with Kentucky Coal Processing or KCP in Kentucky, USA. The facility will be on the site of, and joint funded by, KCP.

The new plant will be located alongside waste to energy provider Inez Power, also owned by KCP.

This company has truly served its apprenticeship and now has a real chance to shine.

So settle in under a tree, put your phone on ‘do not disturb’ and smell the flowers whilst you have a listen, because we’re going green.

Tune in fortnightly for the latest economic commentary and ideas.

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