July is here along with the winter chill. But July also signals the start of a new financial year and chances are most Australians are happy to say goodbye to the last one. This year more than ever it’s a great time to plan your finances for the year ahead, to rebuild or make the most of savings you have made during months of social isolation.
With an extraordinary financial year behind us, it’s a good time to take stock. After 28 years Australia’s record economic expansion ended due to the COVID shutdowns. Our economy contracted by 0.3% in the March quarter and looks set to contract 8% in the June quarter, confirmation that we are officially in recession. The Budget deficit for the 12 months to May was a record $65.5 billion or 3.3% of GDP, $61 billion higher than predicted just last December. Unemployment rose to 7.1% in May, the highest since 2001, with another 1.6 million Australians on JobKeeper payments.
Yet Australia is weathering the COVID storm better than most nations, with signs of building business and consumer confidence. Obviously the big risk is complacency as we’re seeing overseas.
Financial markets finished the financial year mixed, but in better shape than many feared. In the year to June, US shares rose 4.6% while Australian shares trimmed their losses to 10.8% after a partial rebound in the last quarter. Falling global demand hit crude oil prices (down 33%) and iron ore (down 14%). The Aussie dollar firmed 3.7% in June to finish the year at US69c as a mark of Australia’s sure handling of the COVID crisis.
While 2019/2020 was a year we’d like to forget in many ways, there are a few things I’ll be glad to remember – I’m so proud of the way our team rose to all the challenges of the last few months, so delighted we were able to help so many business owners through their JobKeeper applications and obligations to help them through these tough times, so thankful we have such a great lot of clients who put their trust in us and are happy to refer their friends and family to us, and so happy we are able to do our small part to make our world a better place – if you would like to know more, please check out the video our website at https://www.exceladvisors.com.au/about-excel/our-impact/attachment/end-of-financial-year-2020-thanks/.
Stuart Fitzpatrick and Excel Financial Advisors Pty Ltd are authorised representatives of Interprac Financial Planning Pty Ltd AFSL 246638 registered office at Level 8, 525 Finders Street, Melbourne VIC 3000. This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information. Investment Performance: Past performance is not a reliable guide to future returns as future returns may differ from and be more or less volatile than past returns.