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Here’s what you need to know today

• Australia’s economy grew at 0.2% in the most recent quarter, and 1.3% over the past 12 months. While growth has slowed, with 0.6% growth in the previous quarter, it is doing better than many other economies that have contracted (i.e. US economy contracted by 0.2% in the March quarter). (ABC)
  
  

• Virgin Australia is planning to list on the Australian share market. The company is currently owned by private equity firm Bain Capital and announced it would be raising $685 million as part of its IPO. (Capital Brief)
  
  

• The world’s most expensive bank hit a new record high. Commonwealth Bank shares tipped over $180 for the first time ever, making it the first Australian company to be valued at $300 billion. Concerns about CBA’s valuation has done nothing to slow its momentum, with shares up 47% over the past 12 months. (Capital Brief)
  
  

• Meta signed a 20-year deal with nuclear energy generator Constellation Energy to purchase nuclear power from the Clinton Clean Energy Center in Illinois. Meta is following Amazon, Google and Microsoft that have all made huge investments in nuclear energy to power their AI ambitions. (Quartz)
  
  

• As a result of Meta’s announcement, Australian uranium miners had a great day. Paladin was up 10%, Deep Yellow up 6% and Boss Energy up 8%. (Capital Brief)
  
  

• SpaceX is on track to generate $15.5 billion in revenue in 2025 according to Elon Musk. If achieved that will be larger than NASA’s annual operating budget. SpaceX is aiming for 170 rocket launches this year (it has already completed 62) and satellite internet service Starlink has more than 5 million customers worldwide. (Quartz)
  
  

• Elon Musk continues to separate himself from the Trump Administration, calling the ‘One Big Beautiful Bill’ a “disgusting abomination” before adding, “Shame on those who voted for it: you know you did wrong.” If passed, the bill is expected to increase American government debt by US$3.8 trillion over the next 10 years. (Twitter / X)
  
  

• Starting today, America will double its tariffs on steel and aluminium imports to 50%. Trump has been clear he hopes to cut foreign producers out of the US market altogether, “At 25%, they can sort of get over that fence. At 50%, they can no longer get over the fence.” (NBC)
  
  

• An analysis of Trump’s 2018 tariffs on steel and aluminium found they created 1,000 additional jobs in America’s steel industry but at the cost of 75,000 jobs in US manufacturing. (AP News)
  
  

• Chinese manufacturing fell sharply in May, hitting its lowest output in almost 3 years, as a result of America’s tariffs on Chinese imports. This is likely a temporary low point as it was in mid-May that China and the US agreed to each reduce tariffs by 115% for 90 days. (Quartz)
  
  

• South Korea has a new President. After an election that saw the highest turnout in 3 decades, Lee Jae-myung of the liberal Democratic Party won 48% of the vote, enough to win, in a victory that South Koreans hope will turn the page on the Presidency of Yoon Suk Yeol who declared martial law in December and was impeached and arrested in early 2025. (BBC)

What the…?

Bad news for ice-cream lovers, your next cone may be more expensive. A key ingredient in ice-cream, coconut oil, is at record highs after nearly doubling in a year and is roughly 200% higher than its average price between 2000 and 2020.

Why is coconut oil so expensive? A mix of factors. Bad weather has impacted supply, particularly in the Philippines that supplies 45% of the world’s coconut oil, while demand is heightened due to increased use in biofuels and in beauty products as well as ice-cream. (AFR)

Investing is a lifelong journey

Here’s what you can learn today.

Most tax-efficient ways to invest

Community Question: What are the most tax-efficient ways to invest outside of superannuation for middle-income earners?

We put this question to Matt Ingram, financial adviser and partner at Northhaven Wealth

You’re ready to invest in shares. You open a brokerage account in your name and start trading, but in doing so, you may be setting yourself up to pay more tax than necessary without realising.

No one likes paying extra tax to the ATO. While tax evasion is illegal, tax minimisation is completely legal and requires an understanding of how the tax system works.

For simplicity, let’s define middle-income earners as those making between $45,000 and $135,000 per year. This group falls into the 30% tax bracket, plus a 2% Medicare levy, giving them a marginal tax rate of 32%.

A few months pass by and you receive a dividend, which is taxed at 32% (excluding franking credits). Later, you sell some shares for a profit. If held for less than 12 months, the capital gain is taxed at 32%, but if held longer, it’s reduced to 16% thanks to the 50% CGT discount.

That’s not a bad outcome. At the end of the day you’ve made some money and paid some tax, but is this the best option? In many cases for middle-income earners, it is. But there are other options to consider:

• Spousal Ownership: If your partner earns less than $45,000, their marginal tax rate is 16%, meaning dividends are taxed at 16%, and capital gains at 16% (or 8% if held for more than 12 months). Holding shares in their name could reduce the total tax that your family pays.
  
  The flip side to this is if you’re using borrowed funds to invest (for example, if you’re debt recycling), it might make sense to hold the shares in the name of the individual with the higher marginal tax rate to achieve a greater tax deduction.
  

• Family Trusts: A trust allows income or capital gains to be distributed to beneficiaries on lower tax rates. This can be tax-efficient, but trusts come with setup and maintenance costs, making them less practical for many middle-income earners.
  

• Investment Bonds: These structured investments operate on a tax-paid basis, with tax capped at 30%. While this can benefit high-income earners, it’s usually less effective for those on a 32% tax rate when factoring in the 50% CGT discount.

For most middle-income earners, investing in your own or your partner’s name is the simplest and most tax-effective approach. However, tax structures should be considered early. Many investors set up their investments in a way that worked at the time but later find that a different structure would have been more beneficial as their income grew. Understanding your options now can save you significant tax in the future.

Interested in speaking to Matt or another of our hand-picked financial advisers? Fill out the form on our website and we’ll connect you for a free, no-obligation initial meeting.

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