Bonds are not usually the flashy upstarts of the investment world with their every move reported, like stocks.

But the Trump Administration’s extraordinary refashioning of world trade, with on-again off-again tariffs of eye watering amounts, has put bond markets in a similar position to share markets – in turmoil.

So, with the bond markets attracting more attention than usual, we take a closer look at the asset class.

What is a bond?

A bond is a bit like an interest-only loan and there are many different types of bonds available. A government (government bond), or sometimes a large company (corporate bond), issues bonds to investors to raise funds for infrastructure or, in the case of a company, for expansion.

Large institutional investors tend to favour some of the more complex types. Retail investors are more often interested in fixed-rate bonds, known as a fixed-income investment because of the regular payments made to the investor (or the coupon interest rate). The principal (called the face value) is repaid at an agreed date when the bond matures.

These bonds can also be traded on a secondary market by those who’ve chosen to sell their bonds before maturity. In this case, depending on the state of the markets and the economy, the amount they’re worth, or their capital value, may be higher or lower than the face value, which is fixed.

The most common fixed-rate bonds, issued by governments, are generally considered more stable. Nonetheless, all bonds are assigned a credit rating by independent rating agencies such as Standard & Poor’s or Moody’s.

Australia’s Commonwealth bonds, issued by the federal government, are AAA-rated reflecting strong fiscal management, economic stability and low default risk.

State governments and quasi-government organisations such as the World Bank also issue bonds. The risk level for this category of bonds can vary.

Large companies, looking to expand or start new projects, often use bonds as a way to raise funds. Corporate bonds generally pay higher interest but are considered slightly more risky.

How to buy bonds

Investing in bonds can help to diversify a portfolio and provide a steady stream of income but for those with no knowledge or experience of the market, it is important to get quality professional advice and speak to us.

For example, if you had been relying on the conventional wisdom that bond markets are often up when share markets are down, recent share market activity would have delivered a shock. The usual flight to safety from share price volatility to bonds did not happen in the United States where, for a time, both markets were falling.

While it is possible to buy bonds directly when there is a public offer, it can be difficult for smaller individual investors to participate because of the large minimum transactions required.

Instead, most retail investors look to bond funds, bond exchange traded funds (ETFs) or managed funds for exposure to the bond market. The variety of funds on offer can help to diversify a portfolio by giving access to a range of different markets.

What affects bond rates?

Interest rate movements directly affect bond prices on the secondary market.

When interest rates rise, bond prices fall because newly issued bonds will be at the higher rate making older bonds less attractive and reducing demand.

Conversely, bond prices rise when interest rates fall because new bonds will offer the lower rates meaning there will be higher demand for older bonds, driving their prices up.

Bond prices are also influenced by economic conditions and investor sentiment.

Rising inflation can cause bond prices to rise while strong economic growth may decrease bond prices because investors often prefer to buy shares. Bonds with a lower credit risk, such as AAA-rated government bonds, tend to attract higher prices.

Be alert for scams

The Australian Securities and Investments Commission (ASIC) is warning investors about scammers using bond investments as a lure.

In one report earlier this year, scammers claimed to be offering sustainability investment bonds in Bunnings Warehouse.

The scam offered higher than market returns and claimed that investments are protected by the government. It included links to Bunnings genuine website although the company does not offer bonds or any investment products.

ASIC’s MoneySmart website warns that scammers often impersonate real companies. They may use the name of a real person working at the bank or company they say they represent.

“Be wary of surprise contact and independently verify who you are dealing with,” says ASIC. For detailed steps, see check before you invest.

If you would like to learn more about your options for investing in bonds, please give us a call 03 9723 0522.

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In the lead up to the end of the financial year (EOFY), it’s a great opportunity for property investors to pause, prepare their records, and make sure they’re making the most of what they can claim. Tax time might not be the most exciting part of investing, but a little preparation now can make a big difference.

Here’s what to keep in mind as 30 June approaches.

What you can and cannot claim

Property investment comes with a range of expenses, and there are some that can be tax deductible. These generally fall into two broad categories: things you can claim right away, and things you can claim over time.

Immediate deductions often include things like interest on your investment loan, council rates, property management fees, advertising for tenants, and basic repairs or maintenance work. If you’ve paid premiums for landlord insurance, those can typically be claimed too.

Then there’s depreciation—this applies to the wear and tear on both the building itself (if it was built after July 1985) and certain items within the property, like appliances, carpets, or blinds. If you haven’t already, getting a depreciation schedule from a qualified quantity surveyor can be a smart move. It helps make sure you’re not leaving money on the table and the cost of preparing the report can also be claimed.

Keep in mind: rules around what you can and can’t claim—especially for second-hand items—have changed in recent years. So, if you bought your property after May 2017, it’s worth double-checking the latest rules with your accountant before you make any claims.

Timing can make a difference

As EOFY approaches, it’s worth thinking about the timing of your expenses. For example, if you’ve got maintenance work coming up, insurance premiums or interest payments due, bringing them forward into this financial year could help reduce your taxable income.

Some investors also look at prepaying interest on their investment loans, depending on what their lender allows. It won’t be the right strategy for everyone, but it’s something to consider if you’re aiming to bring forward deductions.

Capital gains tax considerations

If you’ve sold an investment property during the year, you’ll also want to be across how Capital Gains Tax (CGT) applies. The timing of the sale, how long you’ve owned the property, and whether it was your primary residence at any point, all play into how much CGT you may pay.

Consider any available exemptions or discounts, such as the 50 per cent discount for assets held longer than 12 months. If you have any underperforming properties, selling them to realise a capital loss can offset your gains and reduce your CGT liability.

Keeping your records in order and avoiding errors

EOFY is also the time to make sure all your records are in order—receipts, loan statements, rental income summaries, and anything related to expenses. Staying organised means fewer headaches at tax time and makes life easier if the ATO ever comes knocking with questions.

According to the Tax Office, results from property data matching found a number of common errors. This included the reporting of net rent instead of gross rental income that results in the same expenses being claimed a second time. Properties are being omitted from returns and properties owned by multiple stakeholders are only having one of the stakeholders reporting the property, when all property owners are required to include this information when lodging their tax return.

Capital works or depreciating assets are also being commonly claimed as repairs and maintenance when they shouldn’t be, according to the ATO. For example, if you are renovating a bathroom, there are rules around what can and cannot be considered ‘a repair’, so you need to understand and distinguish each deduction in order to correctly lodge your tax return.

The big picture

EOFY can also be a good time to take a step back and review how your property (or portfolio) is performing overall. Are you charging rent in line with the market? Are your expenses creeping up? Are you getting the most from your current loan structure?

Review the structure of your property investments. Holding properties in tax-effective structures such as trusts or self-managed superannuation funds (SMSFs) can provide tax advantages, but you’ll need to get expert advice and weigh up the advantages and disadvantages and how this could affect your overall strategy.

Expert advice goes a long way

While it’s tempting to go it alone, property and tax can get complicated—especially with ongoing changes to legislation and what the ATO considers fair game. So, make sure you are getting the right advice to ensure you are claiming everything you’re entitled to and staying compliant with the latest regulations.

Getting on top of your property tax planning in the lead up to 30 June doesn’t just help you at tax time—it sets you up for stronger returns in the year ahead. With a bit of preparation (and a trusted advisor in your corner), you can finish the financial year feeling confident and in control.

Checklist for property investors at tax time

• Conduct a thorough property review
• Maximise tax deductions
  • Interest on loans
  • Property management fees
  • Strata Levies
• Maintenance and repairs
• Prepay certain expenses
• Write off bad debts
• Plan for Capital Gains Tax (CGT)
  • Reduce your CGT liability.
  • Utilise tax-effective structures
• Claim depreciation deductions
• Plan for the future

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Email: integrityone@iplan.com.au

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Stay up to date with what’s happened in the Australian economy and markets over the past month.

Following March’s Federal Budget, Prime Minister Anthony Albanese announced a national election for May 3, kicking off a campaign centred on tax cuts and cost-of-living relief.

Globally, trade war worries dominated headlines and contributed to markets falls during the month.

Click here to view our update.

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

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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.

We understand you will have seen ongoing headlines around market volatility, it’s natural to feel a little uncertain.

That’s why our practice manager and adviser Matthew Borg has put together a short video to explain what’s happening — and, more importantly, what it means for you.

🎥 Watch the video here

In just a couple of minutes, we cover:

• What’s driving current market movements
• Why volatility is a normal part of investing
• Three simple tips to help you stay on track

If you have any questions or would like to discuss your investment strategy, please don’t hesitate to get in touch.

We’re here to support you — through the ups and the downs.

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Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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Treasurer aims to “rebuild living standards”

Much of the 2025 Federal Budget was already known but Treasurer Jim Chalmers had one surprise up his sleeve – $17 billion in tax cuts. The first round of cuts will kick in on 1 July 2026 and second round on 1 July 2027, saving the average earner $536 each year when fully implemented.

With the next Federal Election due to be called any day, the Treasurer named five priorities for his fourth budget: helping with the cost of living, strengthening Medicare, building more homes, investing in education, and making the economy stronger.

He called it a plan for “a new generation of prosperity in a new world of uncertainty” that would help “finish the fight against inflation”.

The big picture

The Budget deficit has made an unwelcome, but not surprising, return. The Albanese government has been clear that we were headed back into the red and Treasurer Chalmers says the $42.1 billion deficit is less than what was forecast at both the last election and at the mid-year update. Gross debt has been reduced by $177 billion down to $940 billion, saving around $60 billion in interest over the decade.

Nonetheless, Australia is navigating choppy international waters with a “volatile and unpredictable” global economy.

Australia will feel the shockwaves from escalating trade tensions, two major global conflicts – in Ukraine and the Middle East, and slowing growth in China. Treasury predicts the global economy will grow by 3.25 per cent in each of the next three years in the longest stretch of below-average growth since the early 1990s.

However, Australia is in a good position to deal with the difficult conditions, the Treasurer says.

The Australian economy has “turned a corner” and continues to outperform many advanced economies. Inflation has moderated “significantly”, and the labour market has outperformed expectations. Meanwhile growth is predicted to increase from 1.5 per cent to 2.5 per cent by 2026-27.

Addressing the cost of living

With the rising cost of living expected to be central to the upcoming election campaign, the Budget aims to deliver more support to those doing it tough with further tax cuts, changes to Medicare and the Pharmaceutical Benefits Scheme (PBS), cuts to student debt and wage increases for aged care and childcare workers among a number of initiatives

Apart from the new tax cuts due in 2026 and 2027, the government will increase the Medicare levy low-income thresholds from 1 July 2024.

The energy bill relief is also being extended to the end of this year. At a cost of $1.8 billion, every household and around one million small businesses will each receive $150 off their electricity bills in two quarterly payments.

The government claims that energy bill relief has helped to drop electricity prices by 25.2 per cent across 2024.

Students aren’t forgotten in the Budget with a cut of $19 billion in student loan debt, with all outstanding student debts reduced by 20 per cent and a promised change to make the student loan repayment system fairer.

The government is tackling the cost of living where it’s often most obvious – at the cash register. It is providing support for fresh produce suppliers to enforce their rights and will make it easier to open new supermarkets. It’s also planning to focus on “unfair and excessive” card surcharges.

Looking for a clean bill of health

Almost $8 billion will be spent to expand bulk billing, the largest single investment in Medicare since its creation 40 years ago.

Treasurer Chalmers says nine-out-of-10 GP visits should be bulk billed by the end of the decade with an extra 4,800 bulk billing practices.

There’ll also be another 50 Urgent Care Clinics across the country, taking the total to 137, and public hospitals will get a boost of $1.8 billion to help cut waiting lists, reduce waiting times in emergency rooms and manage ambulance ramping.

Cheaper medicines

The cost of medicines is also in the government’s sights. The maximum cost of drugs on the Pharmaceutical Benefits Scheme (PBS) will be lowered for everyone with a Medicare Card and no concession card. From 1 January 2026, the maximum co-payment will be lowered from $31.60 to $25.00 per script and remain at $7.70 for pensioners and concession cardholders. Four out of five PBS medicines will become cheaper for general non‑Safety Net patients, with larger savings for medicines eligible for a 60‑day prescription.

An extra $1.8 billion is also being invested to list new medicines on the PBS.

Increasing the housing stock

The government’s previously announced target of 1.2 million new homes over five years has seen 45,000 homes completed in the first quarter.

The budget sees an extra $54 million to encourage modern construction methods and $120 million to help states and territories remove red tape.

With building set to increase, more apprentices are needed, and the government has announced financial incentives of up to $10,000 to encourage more people to take up apprenticeships in building trades. Some employers may also be eligible for $5,000 incentives for hiring apprentices.

The Help to Buy program that allows homebuyers to get into the market with lower deposits and small mortgages will be expanded with an extra $800 million to lift property price and income caps to make the scheme more accessible.

To help increase housing stock available, foreign buyers will be banned from purchasing existing dwellings for two years from 1 April 2025. Land banking by foreign owners will also be outlawed.

Recovering and rebuilding

The damage from ex-Tropical Cyclone Alfred and subsequent rains in Queensland and northern New South Wales is so extensive that it is expected to wipe a quarter of a percentage point off quarterly growth.

Flooding has damaged infrastructure and disrupted supply chains, agricultural production, construction, retail, and tourism activity.

The government expects costs of at least $13.5 billion in disaster support. As a result, the Budget includes $1.2 billion to be placed in a contingency fund to better respond to future disasters.

Looking ahead

Despite concerning events on the world stage, Australia’s economy is emerging “in better shape than almost any other advanced economy”.

Inflation and unemployment are coming down and wage growth will be stronger. To help underpin continuing economic growth, the Budget adds $22.7 billion to the government’s Future Made in Australia agenda.

It includes extra investment in renewable energies and low emissions technologies and an expansion of the Clean Energy Finance Corporation. The plan also includes more than $15 billion in support for private investment in hydrogen and critical minerals production, clean energy technology manufacturing, green metals, and low carbon liquid fuels.

And, as the trade war kicks off, the Budget allocates $20 million to a Buy Australian campaign.

“The plan at the core of this Budget is about more than putting the worst behind us. It’s about seizing what’s ahead of us,” the Treasurer says.

If you have any questions about the Budget measures announced, please don’t hesitate to contact us.

Information in this article has been sourced from the Budget Speech 2025-26 and Federal Budget Support documents.   It is important to note that the policies outlined in this article are yet to be passed as legislation and therefore may be subject to change.

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As investors grapple with uncertainty, keeping a cool head has never been more important.

“Time in the market, not timing the market” is a popular investment philosophy that emphasises the importance of staying invested over the long term rather than trying to predict short-term market movements. While markets can be volatile in the short term, historically, they tend to grow over time.

It’s a strategy that helps you avoid getting caught up in short-term market fluctuations or trying to predict where the market is heading.

With the recent market turbulence, from the global effects of US President Donald Trump’s administration to ongoing conflicts in Ukraine and the Middle East, savvy investors look beyond the immediate chaos to focus on strategies that encourage stability and growth over the long-term.

It’s a hallmark of the approach by the world’s most high-profile investor, Warren Buffet, who argues that short-term volatility is just background noise.

“I know what markets are going to do over a long period of time, they’re going to go up,” says Buffet.

“But in terms of what’s going to happen in a day or a week or a month, or even a year …I’ve never felt it was important,” he says.

Buffet first invested in the sharemarket when he was 11 years old. It was April 1942, just four months after the devastating and deadly attack on Pearl Harbour that caused panic on Wall Street. But he wasn’t fazed by the uncertain times.

Today Buffet is worth an estimated US$147 billion.

Long-term growth in Australia

While growth has been higher in the US, investors in Australian shares over the long-term have also fared well. For example, $10,000 invested 30 years ago in a basket of shares that mirrored the All Ordinaries Index would be worth more than $135,000 today (assuming any dividends were reinvested).^(source)

And it’s not just the All Ords. If that $10,000 investment was instead made in Australian listed property, it would be worth almost $95,000 today or in bonds, it would be worth almost $52,000.

In real estate, the average house price in Australia 30 years ago was under $200,000. Today it is just over $1 milllion.

Meanwhile, cash may well be a safe haven and handy for quick access but it is not going to significantly boost wealth. For example, $10,000 invested in cash 30 years ago would be worth just $34,000 today.^(source)

Diversify to manage risk

Diversifying your investment portfolio helps to manage the risks of market fluctuations. When one investment sector or group of sectors is in the doldrums, other markets might be firing therefore reducing the chance that a downturn in one area will wipe out your entire portfolio.

For example, the Australian listed property sector was the best performer in 2024, adding 24.6% for the year. But just two years earlier, it was the worst performer, losing 12.3%.^(source)

Short-term investments – including government bonds, high interest savings accounts and term deposits – can play an important role in diversifying the risks and gains in an investment portfolio and are great for adding stability and liquidity to a portfolio.

Ongoing investment strategies

Taking a long-term view to accumulating wealth is far from a set-and-forget approach and by staying invested, you give your investments the best chance to grow, avoiding the risks of missing out on key growth periods by trying to time your buy and sell decisions perfectly.

Reviewing your investments regularly helps to keep on top of any emerging economic and political trends that may affect your portfolio. While it’s important to stay informed about market trends, it is equally important not to overreact when there is volatility in the share market.

Emotional investing can lead to poor decisions, so remember the goal is not to avoid market declines but to remain focussed on your overall long-term investment strategy.

Please get in touch with us if you’d like to discuss your investment

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Email: integrityone@iplan.com.au

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