Rateseeker June 2022 Business News Round-up

Rateseeker June 2022 Business News Round-up

A new financial year brings even more news from the business sector over the last month as data shows wage growth paired with a contracting job market and upcoming supply issues expected for the car market. The Australian Tax Office has also warned those working from home that their expenses will be put under the microscope.

Missed the latest news? Here are the four biggest stories below.

Wage growth rises for the fifth consecutive quarter

As we begin the new FY23 financial year, the Australian Bureau of Statistics (ABS) has revealed that businesses around Australia have given their employees an average wage hike of around 2.4% in the year to March, according to their most recent data.

Wages growth has now increased for five consecutive quarters, despite starting from a very low base.

Here’s the historical data on wage rises below:

• December 2020 = 1.4%
• March 2021 = 1.5%
• June 2021 = 1.7%
• September 2021 = 2.2%
• December 2021 = 2.3%
• March 2022 = 2.4%

As the job market continues to show growth, the RBA has stated in their most recent June policy meeting that they expect wages will continue to rise.

” Information from the bank’s liaison program continued to indicate that wages growth would increase from the low rates of recent years as firms compete for staff in a tight labour market.“

The Reserve Bank of Australia

Aussie job market going strong as unemployment falls

In just over a year, the Australian job market has seen some big changes. According to new data from the ABS, back in May 2021, the national unemployment rate sat at 5.1%. Although in of May this year, the figure had dropped to just 3.9% in just 12 months. What’s more, the underemployment rate fell from 7.5% to 5.7% in the same period.

To add to the uplifting news, the participation rate (also known as the share of adults who either are employed or are looking for employment ) had risen from 66.2% to 66.7%.

This means that more people were on the lookout for their next role, more were employed and fewer were out of work. This is great news for businesses as it indicates that more consumers are able to spend money.

Positive news also comes from the Reserve Bank, where its policy meeting revealed expectations that there will be a further decline in unemployment and underemployment in the coming months.

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ATO warns about work related expenses

The ATO has warned that it will be putting work-related expenses under the microscope for those who are making claims over the recent tax period.

Tim Loh, the Assistant commissioner has stated that claiming more work-from-home expenses than a typical work year would mean that the ATO would expect to see a respective reduction in expenses that would contradict work-from-home arrangements. This includes expenses such as clothing, parking, and tolls.

In addition to this, if your working arrangements for the most recent fiscal year aren’t the same as the previous year, your claims for FY21 cannot be copied over to the claims for FY22.

“If your expense was used for both work-related and private use, you could only claim the work-related portion of the expense,” he added. “For example, you can’t claim 100% of mobile phone expenses if you use your mobile phone to ring mum and dad.”

Tim Loh -ATO Assistant Commissioner

To claim a deduction for a work-related expense:

• You must have spent the money yourself and not have been reimbursed
• The expense must directly relate to earning your income
• You must have a record to prove it (usually a receipt)

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Supply issues continue to plague the new vehicle market

There are simply not enough new vehicles to keep up with demand, according to the latest monthly sales report from the Federal Chamber of Automotive Industries.

In the month of May, a total of 94,383 new vehicles were sold, indicating a 6.4% drop compared to last year.

Despite speculation of demand not being high enough, FCAI chief executive Tony Weber said the reduction was due to global supply chains struggling to recover from impact of the recent and ongoing pandemic.

“The global automotive industry continues to be plagued by a shortage of microprocessor units and shipping delays. This issue is not unique to Australia,” he said.

“Car makers continue to report high demand across dealer showrooms and online marketplaces. Pandemic interruptions continue to impact manufacturing and conflict in Ukraine has disrupted vehicle component supply. Monthly sales figures are also dependent on shipping arrivals which continue to be uncertain.”

Tony Webber – FCAI Executive

The top five models in May were:

• Toyota Hi-Lux (5,178 sales)
• Toyota RAV4 (3,925)
• Ford Ranger (3,751)
• Toyotas Corolla (3,310)
• Toyota Landcruiser (2,667)

Looking to get a loan for your new car? Get in touch with our team at Rateseeker today and we can help you secure a loan at the sharpest rates around.