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Here’s what you need to know today

• Early voting is officially open for Australia’s federal election. Both sides of politics paused campaigns after Pope Francis’ death but reconvened in Sydney last night for the third leader’s debate between Anthony Albanese and Peter Dutton. (ABC News)
  
  

• It seems Australians are embracing fast fashion, with Shein recording annual Australian sales of more than $1 billion for the first time in 2024. Australian sales were up 26% to $1.23 billion putting it up there with Australia’s largest fashion retailers, somewhere between discount jeweller Lovisa ($700m in annual sales) and department store Myer ($3.26 billion). (AFR)
  
  

• Chinese EV battery maker CATL unveiled a battery that could provide a car 520km of range after 5 minutes of charging. This up’s fellow Chinese company BYD, who unveiled a battery that could reach 470km range after 5 minutes of charging. For context, Tesla’s supercharger can add 275km of range in 15 minutes. (The Verge)
  
  

• Delivery giant DHL has said it won’t deliver packages with a declared value of over $800 to the US because of the customs backlog being caused by Trump’s tariffs. This rule applies to packages from anywhere in the world. (NPR)
  
  

• For the first time in either of his Presidencies, Trump’s approval rating on the economy is under 50%. The CNBC All-America Economic Survey found 43% of Americans approve of his handling of the economy. That is slightly lower than his overall approval rating of 44%. (Quartz)
  
  

• President Trump kept up the pressure on Federal Reserve chair Jerome Powell, arguing that there is “virtually no inflation” and that the Fed should cut rates. Trump also accused Powell of helping Kamala Harris in the 2024 election by cutting rates last year. (Truth Social)
  
  

• One American company bucking the economic gloom is Netflix, with shares up 29% in the past 6 months. The streaming giant has been the star of Q1 earnings season so far, with revenue up 13% to $10.5 billion and profit up 24% to $2.9 billion. That gives Netflix a 28% profit margin, bucking the conventional wisdom that streaming couldn’t become a profitable business. (CNBC)
  
  

• Macquarie has announced it will sell its US and European public asset management business to Japan’s Nomura for US$1.8 billion. The business unit had $285 billion in assets under management but in the face of falling fees for active managers, was not at a sufficient scale to be a meaningful profit generator for the group. (AFR)

What the…?

The impact of China’s one-child policy will echo for decades to come. In 2024, the number of new marriages fell to a record low despite huge government programs to encourage young people to get married and start families.

6.1 million couples got married last year, down 20.5% year-on-year, according to data from the Chinese government. This was the lowest number of marriages since the government started releasing the statistics in 1986. (CNN)

Investing is a lifelong journey

Here’s what you can learn today.

The pros and cons of Salary Sacrificing

Community question: What are the major pros and cons of salary sacrificing schemes to cover things like cars, childcare fees etc?

We put this question to Jane Mitchell, Senior Financial Adviser at Esencia Wealth

Your employer may offer you the opportunity to salary sacrifice part of your wage to help fund your superannuation, or your employer may provide a choice to fund your rent, mortgage payments, childcare fees, amongst others, depending on your Salary Packaging offered to you.

Pros and Cons

Benefits:

• Tax Savings: One of the primary advantages of salary sacrificing is the potential for tax savings. By sacrificing part of your pre-tax salary, you can reduce your taxable income, leading to lower income tax payments. Salary sacrificing into super can offer significant tax benefits, as the sacrificed amount is taxed at the concessional rate of 15%, which is generally lower than your individual's marginal tax rate.

• Building wealth: Making regular contributions into your super from sacrificing a portion of your salary, allows you to build your long-term wealth, averaging the timing of investing into the market and potentially allowing for a more comfortable retirement in the future. 

• Access to investment options: Super provides access to a wide range of investment options that can help diversify your portfolio and potentially generate higher returns, maximising the growth of your retirement savings. 

• Compound interest advantage: Starting to contribute to super at an earlier age allows you to take advantage of the power of compounding, as contributions have more time to grow, potentially resulting in larger retirement savings. 

Things to consider:

• Reduction in cash salary: Salary sacrificing involves forgoing a portion of your salary, which can result in a reduction in your take-home pay. This can impact your immediate financial obligations and may require careful budgeting.

• Superannuation contributions: While salary sacrificing into superannuation can have tax benefits, it is important to consider the impact limiting your ability to access the sacrificed funds until you reach preservation age, which is currently age 60. (born after 30 June 1964). 

It is crucial to carefully consider your current financial obligations as your take home pay is reduced and you can’t access the funds contributed into your super, until at least age 60.

• Impact on certain entitlements: Salary sacrificed amounts may not be considered when calculating certain entitlements such as overtime pay, leave accruals, or other employment benefits. This could potentially reduce the overall value of your employment package.

• Employment dependency: Relying on salary sacrifice for rent, childcare, non-super benefits, could create a dependency on continued employment, as any changes in employment status or income could impact your ability to meet rental obligations.

It's important to consider the long-term implications of salary sacrificing into super and to seek advice from a financial adviser to ensure that your superannuation strategy aligns with your overall financial goals and retirement plans.

Interested in speaking to a financial adviser? Fill out the form on our website and we’ll match you with one of our hand-picked financial advisers.

Today’s sponsor is Fidelity

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Issued by FIL Responsible Entity (Australia) Limited, ABN 33 148 059 009, AFSL No. 409340. This is general information only and is not intended to be advice of any kind. Consider the PDS and TMD available at www.fidelity.com.au

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