With the price of iceberg lettuce peaking at an insane $12, and inflation not letting up any time soon, it’s a good time to review what you can do to reduce your food spend.

If you’ve been wincing at the total on the register at the check-out recently, you’re not alone. Food prices have spiraled due to crops being impacted by floods in New South Wales and Queensland, coupled with the increase in the cost of fuel due to the war in Ukraine.

Groceries are the second biggest expense for Australians – putting food on the table is second only to the cost of putting a roof over our heads.ⁱ Given that it’s where a lot of our hard-earned cash goes, anything you can do to manage the rising costs of your food shop will really help your bottom line.

Reduce wastage

The first point of call is to reduce the amount of food you throw away. Each year we waste about one in five bags of groceries or around $2,500 per household per year.ⁱⁱ

Good ways to avoid food waste include planning your shop and even creating meal plans for the week ahead. Before you do a shop – have a look at building on what food you already have in the house. The Foodwise website has a planner that lets you enter the ingredients you already have, selects recipes and assembles a shopping list for any extras you may need.

Keep an eye on what’s in the fridge and be aware of use by dates. You can also use your freezer to extend the life of items if they are getting close to the use-by date and you’re unlikely to use them in time.

Seek out specials

The next step is to reduce the amount you are forking out at the checkout.

While it makes sense to shop around, it can be time-consuming but there are a number of apps you can download to help you easily track down the best deals. Trolley Saver and Half Price compare specials across the major supermarkets and Frugl provides the best bargains at a range of grocery retailers.

It’s also worth looking at retailers like Costco and Aldi who offer cost savings across their brands and products. It’s not just the big retailers though – many smaller discount brands are springing up mimicking the Costco model and charging an annual membership fee to access discounts and special offers so it’s worth keeping your eye out for these.

Shop wisely

Making some tweaks to the way you shop can also trim your grocery spend. One of the classic rules of saving money on your groceries is to never shop on an empty stomach. You’d be surprised how many treats make their way into your trolly when you are famished!

It’s also a good idea to look at the unit price of the items you are buying and consider buying in bulk for cost savings. Also consider substituting fresh produce for tinned or frozen and adjusting your recipes to substitute cheaper produce or cuts of meat. Buying what’s currently in season is usually a good way to save on fruit and veggies.

It’s worth seeing if there are any home brand or plain label alternatives to your usual brands. The home brand of a product is usually very similar to the name brand and is often made by the same manufacturer but retailing for a cheaper price. Your taste buds may not even be able to tell the difference – but your hip pocket will.

While these tweaks might not feel like much when you look at individual products, by the time you fill your trolley they can all add up to significant savings at the checkout.

Grow your own

The price of fresh produce is the main culprit for increases – junk food has only increased 1%, compared to around 5.6% for fruit and veggies.^iii,iv But saving on food costs does not mean living on pizza. Why not grow some of your own produce? You don’t need a huge garden – or even to have a garden – many herbs and leafy greens do very well in pots or even on a sunny spot on a countertop.

There are many ways you can save on your food bill and each tiny change you make will add up at the checkout and over time. Given that food inflation seems to be a trend that’s not going away any time soon – it makes sense to start saving today.

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Email: integrityone@iplan.com.au

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

Sustainable investing isn’t new and is becoming more mainstream. From climate change to gender diversity, more people are aligning their money with their values.

In 2021, Australia’s sustainable investment market increased 20% to a record $1.5 trillion. The Responsible Investment Association Australasia (RIAA) 2022 benchmark report found sustainable investments represent 43% of total professionally-managed funds.

In addition to traditional shares and fixed interest sustainable investments offer a wide range of assets, including property, alternatives such as forestry, infrastructure, private equity and cash.

Most big super funds offer a sustainable investment option and some offer this as their default option. You can also buy sustainable managed funds, including a growing list of exchange-traded funds (ETFs).

What are sustainable investments?

Focus on people and planet

Sustainable investing is also known as ethical, responsible and ESG (environmental, social, governance) investing, with the focus on people, society and/or the environment.

Sustainable investments are selected using a variety of screening methods, including:

• Positive screening selects the best investments in their class
• Negative screening excludes harmful sectors, companies or activities such as arms, gambling, animal testing, tobacco and fossil fuels
• Norms-based investing screens for minimum standards of relevant business practices
• Impact investing has the explicit intention of generating positive social or environmental impacts.

The term ESG investing is used when a fund or company commits to sustainable investing in these three areas:

• Environmental – air and water pollution, biodiversity and climate change
• Social – child labour and labour standards, ethical product sourcing, gambling and human rights
• Governance – board diversity, corruption, business ethics, corporate culture and whistle-blower schemes.

The report found gender diversity and women’s empowerment are also gaining popularity.

Sustainable investing is not all warm and fuzzy. Performance still matters.

Performance gains

Initially, sustainable investing often came at the expense of returns but that is no longer necessarily the case.

The report compared the performance of what it terms responsible investment funds and mainstream investments funds (on average and net of fees) over the past 10 years to December 2021.

Responsible multi-sector growth funds consistently outperformed mainstream funds and their benchmark over 1, 3, 5 and 10 years. Responsible Australian share funds generally outperformed or were on par with mainstream funds. Only responsible international share funds disappointed, underperforming mainstream funds across all timeframes.

Watch out for greenwashing

Increased demand for sustainable investments has led to a rapid increase in the number of products available. The rush to cash in on the trend has sometimes led to what is known as ‘’greenwashing”. The Australian Securities and Investments Commission (ASIC) describes greenwashing as the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical.

ASIC warns investors to review the product terms. For example, a fund might describe itself as ‘’no gambling” but may invest in companies that earn less than 30 per cent of revenue from gambling. Look for a clear explanation of how the product will achieve its aims and don’t rely on vague language like “considers”, “integrates” or “takes into account”.

Australian companies lifting their game

It’s not just super funds and managed funds taking sustainable investing more seriously, Australian listed companies are also adapting to changing investor preferences and regulatory environment. A recent analysis of ESG reporting by Australia’s top 200 listed companies, PwC found a 13% increase in companies declaring a commitment to net zero emissions. However, only 55% of those disclosed a transition plan or activities that will enable them to reach net zero.

There was also a 10% increase in companies disclosing climate risks and opportunities, and a 30% increase in companies disclosing a gender diversity policy.

For investors seeking sustainability along with financial returns from their investments, momentum and choice is growing. So please get in touch if you would like to discuss your investment options.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

Stay up to date with the latest developments in the property market over the past month.

The big story on the global economic front continues to be inflation, and how high interest rates will go to tame it.

In Australia, Reserve Bank governor Philip Lowe is watching consumer spending, where higher interest rates are having an impact. Retail trade fell 0.1% for the first time this year.

The ASX200 index demonstrated steady gains over the month, rising more than 5% in November.

Click here for our December update video.

Please get in touch on 03 9723 0522 if you’d like assistance with your personal financial situation.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

Values decline as the cash rate continues to climb

It took the Reserve Bank just seven months to move the official cash rate from an historic low of 0.10% in April to 2.85% by November. The last time the RBA sent the rate up by 2.75% it took more than six years. Therefore, it isn’t any wonder why home values are falling – there’s been a shock to the system.

Although this shock has been short and sharp, and values are declining as a result, prices across the country are still well above pre-pandemic levels. Property experts are not yet willing to call the ‘bottom’ of the cycle, however, the RBA’s change from 0.50% to 0.25% increments is expected to calm the immediate panic.

Property past its peak

Figures from PropTrack (realestate.com.au data business), show national values are -3.81% off their peak. National annual price growth is now sitting at -1.08%, the slowest pace since August 2019.

Sydney is the city with the biggest gap between November 30 and its peak, down -6.28% according to PropTrack while Melbourne is -4.75%.

Across the capitals, Darwin (-0.49%) led the price declines. In Canberra, prices are now 0.54% below their level a year ago. Hobart prices fell 0.27% in November to sit 2.92% below their peak in April. However, prices remain 1.06% higher than levels seen in November last year. Adelaide is currently at its peak.

PropTrack senior economist and report author Eleanor Creagh said after several months of value declines – plus the fastest rise in the cash rate since 1994 – both buyers and sellers are gradually acclimatising.

“Sellers are adapting to market conditions after several months of price falls, whilst buyers are taking advantage of the less competitive conditions relative to spring last year and sentiment is finding a floor,” she said.

Ms Creagh added that as the RBA slows the pace of its hikes prospective buyers are regaining confidence. In other good news for purchasers, there is an increase in supply compared to this time last year.

“From here, further rate rises will increase borrowing costs and reduce maximum borrowing capacities, weighing on prices. However, this will be offset by tight rental markets and rental price pressures, rebounding foreign migration, low unemployment, and housing supply pressures.”

It’s all in the numbers

According to the CoreLogic national Home Value Index, by November’s close there had been seven months of consistent declines. The index revealed that over the last three months, national home values were down to a median of $714,475.

During the same quarter, Brisbane has been home to the sharpest decline, recording -5.6%.

Sydney and Hobart followed with identical declines of-4.4%.

Canberra recorded a -3.8% dip, with Melbourne recording -2.7%.

Adelaide, Darwin and Perth felt minimal movement under 1% with falls of -0.8%, -0.6% and -0.5% respectively.

When CoreLogic number crunchers put the capital cities together there had been a combined slump of -3.5% and regionally values fell similarly by -3.6%.

Although values are falling across the country, data shows the pace of declines has actually eased over the past three months across Sydney and the past four months in Melbourne, with many other smaller capitals and most regional markets also seen the pace of declines decelerate.

Tim Lawless, CoreLogic’s research director, said while values have been in negative territory for several months now, it’s still too soon to call the trough of the market just yet.

“There is still the possibility that the pace of declines could reaccelerate, especially if the current hiking cycle persists longer than expected,” he said.

“To-date, the housing downturn has remained orderly, at least in the context of the significant upswing in values. This is supported by a below-average flow of new listings that is keeping overall inventory levels contained,” Mr Lawless added that we’re yet to see the full impact of rate rises as households likely still hold excess savings accumulated during lockdown, plus there is a large cohort of fixed rate borrowers who’ve so far been insulated from rapid rate rises.

Despite the nationwide price falls, CoreLogic reports housing values are still above pre-Covid levels, which would imply most homeowners are sitting in a positive valuation position relative to their purchase price – as long as they bought before the pandemic.

Note: all figures in the city snapshots are sourced from: CoreLogic’s national Home Value Index (November 2022)

If you have any questions or need any information please give us a call on 039723 0522.

Stay up to date with the latest developments in the property market over the past month.

The Federal Reserve Bank has announced a rise to the official cash rate, increasing it by 25 basis points from 2.60% to 2.85% in response to continued inflationary pressures.

Our video also takes you through an overview of the state of the property market, including a breakdown across all capital cities of the changes in dwelling values over the past month, as well as over a period of 12 months.

Click here for our November update video.

Please get in touch on 03 9723 0522 if you’d like assistance with your personal financial situation.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

In his first Budget, Treasurer Jim Chalmers’ emphasised the three Rs – responsible budget repair and restrained spending, right for the times.

For good measure, resilience also got a mention with spending targeted at building a more modern economy to deal with the challenges ahead.

This is the first budget from a federal Labor government in almost a decade, barely five months since Labor was elected and seven months since the Coalition’s pre-election budget in March, so it was bound to be a little different. The Treasurer used the opportunity to update the shifting economic sands and reset spending priorities to align with the new government’s policy agenda.

For Australians wondering what the Albanese Labor government will mean for them and their family, this is the first piece of a puzzle that will be completed over the next three years.

The big picture

The Labor government has inherited an improving bottom line, with the deficit for 2022-23 expected to come in at $36.9 billion, an improvement of more than $40 billion on the pre-election forecast. This was due to high commodity prices for our exports and higher tax receipts from a strong labour market and robust corporate profits.

The deficits of $224.7 billion previously forecast for the next four years have shrunk to $182 billion. The difference of around $40 billion will go towards funding the government’s election promises and budget repair.

Labor has also found $22 billion in savings by cancelling or redirecting programs planned by the previous Coalition government, and a further $3.6 billion in cuts to external consultants, marketing, travel and legal expenses. Savings will also come from clamping down on tax avoidance by individuals and foreign corporations.

But as the Treasurer is fond of saying, storm clouds are looming, and he singled out inflation as the biggest challenge.

Economic challenges ahead

Inflation is forecast to peak at 7.75% by year’s end, before returning to 3.5% in 2023-24. Despite low unemployment currently at 3.75% it is tipped to rise to 4.5% by 2023-24, the surge in inflation means wages are unlikely to grow in real terms until 2024 at the earliest. Wages growth is forecast to be 3.75% in 2023-24, overtaking inflation of 3.5%.

With more interest rate hikes expected to tame inflation, debt is also set to climb from $895.3 billion last financial year to a forecast of $927 billion in 2022-23 and upwards over the forward estimates.

With global economic headwinds building to gale force, Australia’s economic growth is expected to slow as cost-of-living pressures bite into household budgets.

While Dr Chalmers does not expect Australia to slide into recession like many of our trading partners, economic growth is already slowing. Real gross domestic product (GDP) is forecast to be 3.25% in 2022-23, down from 3.9% last financial year, and 1.5% in 2023-24, 1 percentage point lower than predicted in the March Budget.

Support for families

Childcare and improved parental leave are a priority area for the new government, in an effort to support families, reduce cost-of-living pressures and improve women’s workforce participation.

Already, $4.7 billion has been earmarked for childcare over the next four years, with families earning less than $530,000 to receive extra childcare subsidies from 1 July 2023. An extension of paid parental leave from the current 18 weeks to 26 weeks is also set to be phased in from next July, so neither initiative will add to the current Budget.

Health and aged care

Pressures on the federal health and aged care budget are mounting in the wake of COVID and an $8.8 billion blowout in the NDIS budget which will reach $166.4 billion over four years. An extra 380 staff will be hired at a cost of $158.2 million to speed up claims and make the system more efficient.

$750 million will be spent strengthening Medicare and $235 million over four years to roll out Urgent Care Clinics to reduce pressure on public hospitals.

Following revelations from the Aged Care Royal Commission and lessons learned during the pandemic, the government has pledged to fund an increase in aged care workers’ wages.

And the cost of subsidised prescription medications will be cut from $42.50 to $30 from January 1, at a cost of $756 million over four years.

More affordable housing

A centrepiece of the Budget to improve housing affordability and chronic shortages is a new Housing Accord to build 1 million new houses in five years beginning in 2024.

The new $10 billion Housing Australia Future Fund will provide a sustainable funding source to increase housing supply, including 20,000 new social housing dwellings, 4,000 of which will be allocated to women and children impacted by family and domestic violence and older women at risk of homelessness.

The plan paves the way for significant public and private investment in new housing across the country, following an historic agreement between the federal government, the states and private investors including superannuation funds.

Jobs, skills and education

Federal, state and territory governments have committed to a $1 billion one-year agreement to deliver 180,000 fee-free TAFE and community-based vocational education places from January 2023. Support will be targeted to priority groups, including First Nations people, and priority areas such as care sectors.

The government will also create 20,000 more subsidised university places over 2023 and 2024. The initiative will be targeted at disadvantaged groups to study courses where there are skills shortages.

Nation building and future-proofing

As part of its budget review, the government will ‘’realign” $6.5 billion of existing infrastructure spending. It will spend $8.1 billion on key infrastructure projects including the Suburban Rail Loop East in Melbourne, the Bruce Highway and other important freight highways.

The government has also committed to at least $40 billion in new borrowing to set up funds and companies to invest in policy promises. These include the $20 billion Rewiring the Nation Corporation to invest in the electricity grid, $15 billion National Reconstruction Fund for local manufacturing and the $10 billion Housing Australia Future Fund to invest in social housing.

In an acknowledgement of the increased frequency and severity of natural disaster, up to $200 million per year will be set aside for disaster prevention and resilience.

Climate change

A more comprehensive approach to climate change is also back on the agenda, with total climate-related spending of $24.9 billion over 2022-23.

As many of the nation’s largest emitters are in regional areas, the government will establish a $1.9 billion Powering the Regions Fund to help transition regional industries to net zero. And $345 million will be made available to increase uptake of electric vehicles.

Superannuation, pensioners and tax

What’s not in the Budget is also important. There was little new spending to help retirees and welfare recipients, but pensions and payments will increase due to indexation.

As previously announced, the amount Age Pensioners can earn before they begin to lose pension entitlements will temporarily increase from $7,800 to $11,800 this financial year.

Almost $70m has been allocated to increase the income threshold for the seniors’ health card from $61,284 to $90,000 for singles and from $98,054 to $144,000 (combined) for couples.

And $74m will be provided to encourage pensioners to downsize homes, including by extending the assets test exemption for principal home sale proceeds from 12 months to 24 months.

While most superannuation fund members will welcome the lack of tinkering to the super rules, the investment potential of the new affordable housing initiatives should provide a valuable source of income to super funds and their members.

Women’s safety

The Treasurer pledged a record investment of $1.7 billion to support implementation of the new National Plan to End Violence Against Women and Children. This will include funding for 500 new frontline service and community workers to support women in crisis.

The Government is also legislating 10 days of paid family and domestic violence leave for all types of employees.

Looking ahead

The next 12 months are likely to be challenging for the economy and for households trying to budget for rising prices and interest rates, including higher mortgage repayments, at a time when home values are falling and real wages are going backwards.

The Treasurer has tried to walk a fine line between budget repair and responsible spending with long-term economic benefits for individuals and the nation.

Coming just months after the federal election, this Budget should be seen as laying the groundwork for the three Budgets to follow.

Information in this article has been sourced from the Budget Speech 2022-23 and Federal Budget Support documents.

It is important to note that the policies outlined in this publication are yet to be passed as legislation and therefore may be subject to change.

If you have any concerns or questions regarding the potential impacts this budget may have on your financial plan please give us a call.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.