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Financial markets are tanking. Here’s why it’s best not to panic

<div class="theconversation-article-body"> Financial markets around the world have been slammed by the Trump adminstration’s sweeping tariffs on its trading partners, and China’s swift retaliation. Share markets have posted their biggest declines since the COVID pandemic hit in 2020, as fears of US recession surged. Iron ore, copper, oil, gold and the Australian dollar have all tumbled. On Wall Street, <a href="https://www.reuters.com/markets/sp-500-loses-24-trillion-market-value-biggest-one-day-loss-since-2020-2025-04-03/">leading indices</a> have fallen around 10% since the tariffs were announced, while the tech-heavy Nasdaq is down 20% from its recent peak. European and Asian markets have also slumped. In Australia, the key S&P/ASX 200 slid another 4.2% on Monday to levels last seen in December 2023, taking its three-day losses since the announcement to more than 7%. <hr /> <iframe id="AJ2rZ" class="tc-infographic-datawrapper" style="border: 0;" src="https://datawrapper.dwcdn.net/AJ2rZ/" width="100%" height="400px" frameborder="0" scrolling="no"></iframe> <hr /> <h2>Why are markets reacting so badly?</h2> Financial markets reacted so negatively because the tariffs were much larger than expected. They represent the <a href="https://www.abc.net.au/news/2025-04-05/trump-tariffs-upend-80-year-old-world-economic-order/105139464">biggest upheaval</a> in global trade in 80 years. Many traders were hoping the tariffs would be used mainly as a bargaining tool. <a href="https://finance.yahoo.com/news/live/trump-tariffs-live-updates-trump-digs-in-says-markets-may-have-to-take-medicine-as-stock-futures-plunge-191201959.html">But comments</a> by US President Donald Trump that markets may need to “take medicine” seem to suggest otherwise. The tariffs are expected to weaken economic growth in the US as consumers pare back spending on more expensive imports, while businesses shelve investment plans. Leading US bank JP Morgan has put the <a href="https://www.reuters.com/markets/jpmorgan-lifts-global-recession-odds-60-us-tariffs-stoke-fears-2025-04-04/">chance of a US recession</a> as high as 60%. This comes at a time when the US economy was already looking fragile. The highly regarded GDPNow model developed by the <a href="https://www.atlantafed.org/cqer/research/gdpnow">Atlanta Federal Reserve Bank</a> indicates US March quarter GDP will fall 2.8%, and that was before the tariff announcement. <h2>Worries about global growth</h2> Fears of a recession in the United States and the potential for a global downturn has led to a broad sell-off in commodity prices, including iron ore, copper and oil. Further, the Australian dollar, which is seen as a barometer for risk, has <a href="https://wise.com/au/currency-converter/currencies/aud-australian-dollar">fallen below 60 US cents</a> in local trading – its lowest level since 2009. While the direct impact of tariffs on Australia is expected to be modest (with around 6% of our exports going to US), the indirect impact could be substantial. China, Japan and South Korea together take more than 50% of Australia’s exports, and all have been hit with significantly higher tariffs. Treasurer Jim Chalmers said on Monday that the direct impact on the Australian economy would be “<a href="https://www.abc.net.au/news/2025-04-07/asx-markets-business-news-live-updates/105144276">manageable</a>”. The full effect on Australia will depend on how other countries respond, and whether we can redirect trade to other markets. The rapid decline in the Australian dollar will help offset some of the negative effects associated with a global downturn and the fall in commodity prices. We can also expect some interest-rate relief. Economists are now predicting <a href="https://www.afr.com/markets/debt-markets/traders-expect-up-to-five-rba-rate-cuts-amid-market-turmoil-this-year-20250407-p5lpo0">three further interest rate cuts</a> by the Reserve Bank, starting in May. This brings economists into line with financial market forecasts. <h2>Hang in there, markets will recover</h2> Watching equity markets tumble so dramatically can be unsettling for any investor. However, it is important to note that equity markets have experienced many downturns over the past 125 years due to wars, pandemics, financial crises and recessions. But these market impacts have generally been temporary. <hr /> <iframe id="lsNFF" class="tc-infographic-datawrapper" style="border: 0;" src="https://datawrapper.dwcdn.net/lsNFF/" width="100%" height="400px" frameborder="0" scrolling="no"></iframe> <hr /> History suggests that over the long term, equity prices continue to rise, supported by growing economies and rising incomes. The key thing for investors to remember is to not panic. Now is not the time to decide to switch your superannuation or other investments to cash. This risks missing the next upswing while also crystallising any current losses. For example, despite the steep market sell-off in March 2020 as the first COVID lockdowns came into effect, the Australian share market had completely recovered those losses by June 2021. It is good practice for investors to regularly reassess their risk profile to make sure it is right for their current stage of life. This means reducing the allocation to riskier assets as investors get closer to retirement age, while also maintaining a cash buffer to avoid having to sell assets during more turbulent periods such as now. <h2>Super funds are exposed to global risks</h2> The current sell-off has highlighted a potential issue facing the superannuation industry. So much of our superannuation is now invested in global equity markets, mostly in the US, because Australia’s <a href="https://www.abc.net.au/news/2025-04-02/australia-superannuation-retirement-savings/105098840">superannuation savings pool</a> – at more than A$4 trillion – has outgrown the investment opportunities available in Australia. Another issue facing the superannuation industry is the growth of cyber attacks, with several funds <a href="https://theconversation.com/hackers-have-hit-major-super-funds-a-cyber-expert-explains-how-to-stop-it-happening-again-253835">targeted in a recent attack</a>. Given the massive size of the assets held by some funds, it would seem they need to improve their security to be on par with that of the banking system.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/253929/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> By <a href="https://theconversation.com/profiles/luke-hartigan-1491669">Luke Hartigan</a>, Lecturer in Economics, <a href="https://theconversation.com/institutions/university-of-sydney-841">University of Sydney</a> This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/financial-markets-are-tanking-heres-why-its-best-not-to-panic-253929">original article</a>. Image: Shutterstock </div>

Money & Banking

Refinancing your home later in life – what you need to know

There are many reasons why you may look to refinance your home. The obvious one is to lower mortgage repayments with a better rate. However, other reasons people refinance later in life include: <ul> <li>unlocking equity to invest</li> <li>paying down other debts</li> <li>buying a holiday home</li> <li>funding extended travel</li> <li>launching a new business</li> <li>supporting children with a property deposit</li> </ul> Regardless of why you want to refinance, the points below will help you navigate your options. Changing lenders It may have been a while since you last revisited your mortgage, meaning you may not be aware of current lending options and traps. A common trick lenders use is the so-called “headline rate” to grab your attention. However, this interest rate is typically not what you end up paying. It may only be an introductory rate for the first few months, or hefty fees attached may wipe out any savings. Banks aren’t the only ones offering loans nowadays. Registered non-bank lenders, fintechs and online lenders can refinance your mortgage and provide other credit services the same as any bank; they just don’t take cash deposits. Alternatively, you could explore credit unions and mutual societies. Also consider any shareholder benefits you may have. Most banks have done away with them now but may still honour pre-existing ones. If you change lenders, you could lose this entitlement – permanently. Reverse mortgages Generally, only available to people aged 60-plus, a reverse mortgage effectively allows you to unlock equity in your home without you needing to make immediate repayments. However, they often have strict conditions including: <ul> <li>minimum borrowing amounts</li> <li>maximum borrowing ratios</li> <li>higher interest rates than standard mortgages</li> </ul> Crucially, the interest accrues over time and is repaid when you sell, move or pass away. As such, your debt liability grows over time – potentially impacting your future living arrangements and how much is left for beneficiaries in your will. The Govt has the “loan equity scheme” as another option to lenders. I just want to highlight the need to be careful with reverse mortgages. Changing homes Rather than selling, downsizing could involve making an investment property your primary residence and then renting out your existing home. This approach may require you to refinance both loans simultaneously. There will also be tax considerations to work through – including Capital Gains Tax liabilities when you do sell, negative gearing, depreciation, and changes to your income tax. Then there are the lifestyle factors to weigh up, especially if you are moving to a different area: <ul> <li>living expenses</li> <li>insurance and travel costs</li> <li>access to healthcare</li> <li>rental income</li> <li>property management expenses</li> </ul> Remember that if you have a Self Managed Super Fund (SMSF), it CANNOT own any property that you directly use yourself, including your home. Becoming Bank of Mum and Dad Refinancing can unlock equity to support adult children with their first property deposit. However, it isn’t without its risks. Ask yourself honestly: <ul> <li>Will this be a gift or loan?</li> <li>If a loan, under what terms? Will interest be applied? How and when will repayments be made? What if they default?</li> <li>What happens if their relationship breaks down, will you get your money back?</li> <li>How does going without that money affect your retirement?</li> <li>Do you have alternative assets to support you if your circumstances change?</li> <li>How does this affect inheritances or deposit contributions to your other children?</li> <li>Can you assist them another way without using your home equity?</li> </ul> Draw up a written agreement outlining all conditions and scenarios to avoid disagreements in the future. Pension impacts Don’t overlook how refinancing your home could impact your pension. While your home is exempt from the means test, any income or assets you generate from unlocking equity is not. You could inadvertently see your pension amount reduced or your eligibility voided altogether. This would come as a nasty shock if you haven’t pre-budgeted for such a change! Getting advice To ensure you get the best bang for your buck when refinancing, be sure to enlist the help of a good: <ul> <li>mortgage broker to source the best loans for your circumstances</li> <li>insurance broker to ensure your cover is right sized for your needs, risk and budget</li> <li>accountant to work through any tax implications</li> <li>estate planner to manage any changes</li> <li>financial adviser to keep your investments and financial strategy working for you</li> </ul> Ultimately, decisions – including about refinancing – are only as good the information you have at hand. So, make sure you have all the relevant facts before signing on the dotted line. Helen Baker is a licensed Australian financial adviser and author of the new book, Money For Life: How to build financial security from firm foundations (Major Street Publishing $32.99). Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at <a style="color: #467886;" title="http://www.onyourowntwofeet.com.au/" href="http://www.onyourowntwofeet.com.au/">www.onyourowntwofeet.com.au</a> Disclaimer: The information in this article is of a general nature only and does not constitute personal financial or product advice. Any opinions or views expressed are those of the authors and do not represent those of people, institutions or organisations the owner may be associated with in a professional or personal capacity unless explicitly stated. Helen Baker is an authorised representative of BPW Partners Pty Ltd AFSL 548754.

Money & Banking

5 mistakes people make setting financial goals

In discussions around money and goal setting, people talk a lot about financial freedom. What does that mean to you, though? We might redefine money as ‘a unit of choice’, because the more money you make, the more choices you have. Everyone’s aspirations are different, which is one reason why there’s no one-size-fits- all approach to wealth. It’s time to begin to understand what financial freedom means to you, because how on earth are you going to get there, if you don’t know where there is? How will you craft a strategic wealth-building plan when you don’t know what your target is? How will you know if you are making the right decisions in the right areas, decisions that are intentionally and systematically advancing you towards your outcomes. Here are some of the big mistakes I see people make when setting financial goals. <h2>Mistake #1: They have none!</h2> Without a goal, how will you know what to steer towards? You are left just ‘hoping’ that one day things will work out. With no clear direction to head towards, any actions you take are more or less random. You’re often left sitting idle and going nowhere fast, just swept along by whatever current comes your way. <h2>Mistake #2: They make them too big</h2> This might seem counterintuitive, especially since the typical conversation about personal development emphasises aiming for big, ambitious goals. And while these can be valuable, helping to elevate your thinking and giving you something inspiring to work towards, the problem arises when they are your only focus. Without smaller, achievable milestones to serve as stepping stones, the gap between where you are now and your ultimate goal can feel overwhelming. This can make it hard for your subconscious mind to fully commit, leading to procrastination or self-sabotage due to fear of not knowing how to get there. <h2>Mistake #3: They make them too small</h2> While small goals may seem manageable, they can lack the power to ignite your motivation or emotional drive or to be the catalyst that pulls you towards something greater than who and where you are in life right now. Small, uninspiring goals can make it easy to remain complacent. Without a purpose or vision that stretches you, there’s no real incentive to pursue them with passion. They don’t create the emotional connection that’s essential for driving sustained effort and overcoming obstacles. As a result, you may never fully commit to these goals, and they end up being more like tasks to check off a list than meaningful milestones on your path to success. <h2>Mistake #4: They are vague and wishy-washy</h2> When your goals are unclear and lack focus, they are difficult to achieve. Goals like ‘I want to be rich’ of ‘I want more money’ are too broad to provide any real direction. Without concrete details – such as specific numbers, deadlines or actionable steps – you don’t have a clear path to follow. Vague goals make it hard to measure progress or stay motivated, because there’s nothing tangible to work towards. As a result, your efforts can become inconsistent, and it’s easy to lose focus. Without clarity, you can’t point your actions in a specific direction, which makes it unlikely you’ll make any meaningful progress. A well-defined goal, on the other hand, creates a roadmap and keeps you accountable along the way. <h2>Mistake #5: They have no plan to make it real</h2> Setting a clear goal is undeniably important but it’s only part of the process. Just because someone says they want a specific outcome does not mean they will achieve it. Yet many people fixate solely on the goal itself, or they try to manifest wealth and happiness through the ‘law of attraction’ alone. Most people spend 95 per cent of their time focusing on setting the goal and only 5 per cent on the actions needed to achieve it. Do you see the flaw in that approach? Instead, reverse the focus. Spend 5 per cent of your time defining the goal, and 95 per cent of your time working towards making it a reality. This is where having the right system becomes crucial. How do we break free from impotent goal setting and instead craft a set of financial goals that are not only big, beautiful and inspiring, but achievable. By setting targets that are tangible and tactical and are going to set you up to win, you become more than who you are right now. In the end, a goal without a plan is just an idea. A plan without a goal is simply directionless effort. It may keep you busy, but it won’t lead you anywhere meaningful. Both the goal and the plan must work together – one providing the destination, the other offering the roadmap. I always tell my clients they will never out-earn themselves. If you want to level up your results in life, you have to first level up as a person and raise the standards in how you choose to play the game. This is an edited extract from Escape the Middle (Wiley $32.95) by Todd Polke. Todd is an investor, entrepreneur and international educator in investing and wealth creation. For over two decades, he has guided thousands of individuals in growing and scaling their wealth to achieve financial independence. Find out more at <a href="https://www.portfoliowealth.com%20" target="_blank" rel="noopener">www.portfoliowealth.com </a> Image: Shutterstock

Money & Banking

Population panic: how demography is used for political gain

<div class="theconversation-article-body"> Population is far from the seemingly innocuous and bland topic of “people”. We’re not just talking people. We’re talking the very foundation of society, culture, and economy … and it’s deeply fraught. It’s also an effective political point scorer. Population scrutiny waxes and wanes in Australian populist and political discourse, much like many nations across the globe. <a href="https://theconversation.com/whats-behind-the-dramatic-shift-in-canadian-public-opinion-about-immigration-levels-219193">Canada</a>, <a href="https://theconversation.com/biden-defends-immigration-policy-during-state-of-the-union-blaming-republicans-in-congress-for-refusing-to-act-225158">the United States</a>, <a href="https://theconversation.com/a-far-right-political-group-is-gaining-popularity-in-germany-but-so-too-are-protests-against-it-223151">Germany</a>, <a href="https://theconversation.com/in-demand-but-disempowered-why-low-skilled-migrant-workers-face-even-worse-exploitation-under-nzs-new-rules-227993">New Zealand</a> and <a href="https://theconversation.com/uk-taking-back-control-of-its-borders-risks-rolling-back-human-rights-protections-230044">the United Kingdom</a> are all grappling with population issues. But when we talk population, it’s pretty safe to read immigration. It’s immigration that has most of the world talking, because growth for many is dominated by international movements, not local growth. Population growth due to immigration has fed growing fears from some quarters about a <a href="https://www.abc.net.au/religion/five-years-terror-christchurch-mosque-danger-muslim-women/103593682">replacement of the majority dominance</a> – in other words, that white people will no longer be the majority in Australia. Contemporary population debate has been largely ill-informed, lacking nuance and is often detrimental. Rooted in a long history of the way we talk about population, contemporary debate is best understood in context, and with facts. <h2>Population dynamics and change</h2> Population is most simply a <a href="https://population.gov.au/population-topics/topic-population-measurement">bunch of individuals</a> living in a specific place. Sounds boring, I know, but the reality is something much greater. When we start talking about what underpins population – composition, characteristics and change – it becomes clear why population is so political. Populations are comprised of varying characteristics – think age, sex, and geography. Characteristics like the age structure of a population have a direct impact on the workforce and economic wellbeing of a nation. A younger population means more expenditure invested in the young to ensure a strong workforce in the future. This is known as the <a href="https://www.prb.org/wp-content/uploads/2019/11/prb-demographic-dividend-evidence-1.pdf">demographic dividend</a>. An older population age structure, on the other hand, sees more spending on the upper end of the life course – senior people – and pressures on the workforce meeting the economic needs of the nation. This is <a href="https://www.abs.gov.au/ausstats/abs@.nsf/2f762f95845417aeca25706c00834efa/851dece969d9182cca2570ec000a2501!OpenDocument">structural ageing</a>. Australia’s population, like most of the world, is structurally ageing. We’re living longer and <a href="https://blog.id.com.au/2023/population/population-trends/australias-birth-rate-falls-in-2022#:%7E:text=Australia's%20birth%20rate%20has%20been,level">not replacing ourselves</a> through births. Living longer is a mark of technological success and ingenuity, and the same could be said about below-replacement births. But our success has some downsides. <blockquote class="instagram-media" style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" data-instgrm-captioned="" data-instgrm-permalink="https://www.instagram.com/p/DBP0rqgSCm5/?utm_source=ig_embed&utm_campaign=loading" data-instgrm-version="14"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"> </div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"> </div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"> </div> </div> </div> <div style="padding: 19% 0;"> </div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"> </div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <div style="padding: 12.5% 0;"> </div> <div style="display: flex; flex-direction: row; margin-bottom: 14px; align-items: center;"> <div> <div style="background-color: #f4f4f4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(0px) translateY(7px);"> </div> <div style="background-color: #f4f4f4; height: 12.5px; transform: rotate(-45deg) translateX(3px) translateY(1px); width: 12.5px; flex-grow: 0; margin-right: 14px; margin-left: 2px;"> </div> <div style="background-color: #f4f4f4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(9px) translateY(-18px);"> </div> </div> <div style="margin-left: 8px;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 20px; width: 20px;"> </div> <div style="width: 0; height: 0; border-top: 2px solid transparent; border-left: 6px solid #f4f4f4; border-bottom: 2px solid transparent; transform: translateX(16px) translateY(-4px) rotate(30deg);"> </div> </div> <div style="margin-left: auto;"> <div style="width: 0px; border-top: 8px solid #F4F4F4; border-right: 8px solid transparent; transform: translateY(16px);"> </div> <div style="background-color: #f4f4f4; flex-grow: 0; height: 12px; width: 16px; transform: translateY(-4px);"> </div> <div style="width: 0; height: 0; border-top: 8px solid #F4F4F4; border-left: 8px solid transparent; transform: translateY(-4px) translateX(8px);"> </div> </div> </div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center; margin-bottom: 24px;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 224px;"> </div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 144px;"> </div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" href="https://www.instagram.com/p/DBP0rqgSCm5/?utm_source=ig_embed&utm_campaign=loading" target="_blank" rel="noopener">A post shared by Australian Bureau of Statistics (@absstats)</a> </div> </blockquote> The trouble with below-level births and an ageing population is that the local age structure is not sufficient to meet the <a href="https://treasury.gov.au/intergenerational-report">needs of the workforce</a>. Simply, the local Australian population cannot meet the economic needs of the nation, and this has the potential to see living standards go backwards. Immigration helps offset the adverse consequences of an ageing population. Population change occurs due to births, deaths and migration. Commonly known as the population balancing equation, population growth is expressed as: births minus deaths plus migration. Immigration makes up the majority of population growth in Australia and has done so consistently since <a href="https://www.aihw.gov.au/reports/australias-health/profile-of-australias-population">around 2005</a>, with the exception of international border closures during COVID. Natural increase – the balance of births minus deaths – also contributes to population growth in Australia. However, increasing deaths and declining births means the country is expected to see <a href="https://theconversation.com/eight-charts-on-how-australias-population-is-growing-and-changing-227153">natural decline by 2054</a>. <h2>Population problem</h2> In Australia, there has been a preoccupation with the <a href="https://www.aihw.gov.au/reports/australias-health/profile-of-australias-population">drivers of population change</a> since colonisation. Is the nation’s population <a href="https://digital-classroom.nma.gov.au/defining-moments/postwar-immigration-drive">growing too slowly</a>? <a href="https://www.themandarin.com.au/237985-australia-population-27-million-milestone/">Too fast</a>? Why are women having <a href="https://theconversation.com/women-in-rich-countries-are-having-fewer-kids-or-none-at-all-whats-going-on-229185#:%7E:text=Simply%2C%20women%20are%20often%20not,and%20buying%20a%20first%20home.">too few children</a>? Are the <a href="https://www.smh.com.au/politics/federal/abbott-calls-for-middle-class-women-to-have-more-children-20200128-p53vkx.html">wrong kind of women</a> having too many children? Will migrants <a href="https://www.abc.net.au/news/2021-10-15/migrant-movement-in-australia-covid/100536114">want to come</a> to the country? Are there <a href="https://www.theguardian.com/australia-news/2024/mar/21/migration-numbers-australia-2023-rise">too many migrants</a> coming to Australia? Australia is rarely not in a state of <a href="https://theconversation.com/solving-the-population-problem-through-policy-110970">population panic</a>. Population panic once stemmed from being a small population in a big country vulnerable to external military attack. Now population panic is about the pace of growth being too great, due to immigration. And it doesn’t take much to stoke <a href="https://www.theguardian.com/global-development/2022/oct/18/global-population-growth-8-billion-unfdp-united-nations-warning-alarmism">population fear</a>. Population is charged and offers an easy trigger point to leverage voters. Politicians on all sides of the ideological landscape know this and use population discourse effectively for political gain. <figure><iframe src="https://www.youtube.com/embed/h5CubF42DGI?wmode=transparent&start=0" width="440" height="260" frameborder="0" allowfullscreen="allowfullscreen"></iframe></figure> Since the <a href="https://www.jstor.org/stable/41110698">early 1900s</a>, Australia’s history has been dotted with inquiries into growth and birth rates. In fact, at the time of colonisation, the male-dominated imbalance in the colony sparked calls for more women from Britain – <a href="https://unsw.press/books/the-future-of-us/">of suitable status</a> – to help arrest high rates of hooliganism, drunkenness, and sexually transmitted infections. Women of standing were believed to help socialise the nation and provide essential children for nation building. Nothing much has changed really, with the Treasurer Jim Chalmers saying in the lead up to the 2024 federal budget: “<a href="https://youtu.be/JLzp53D6thg?si=p8YheMdF0-ndO9DB">It would be better if birth rates were higher</a>”. <h2>So why aren’t women having babies?</h2> Australian federal treasurers have expressed concerns about birth rates over many years, across different governments. Chalmers wasn’t the first and he won’t be the last bemoaning below-replacement births. In 2004, then-treasurer Peter Costello <a href="https://ministers.treasury.gov.au/ministers/peter-costello-1996/transcripts/doorstop-interview-treasury-place-melbourne-16">famously said</a>: “have one for mum, one for dad and one for the country”. <a href="https://www.thenewdaily.com.au/finance/finance-news/2020/07/25/baby-bonus-frydenberg-costello">Josh Frydenberg, while treasurer, stated</a>: <blockquote> I won’t go as far as to say, like Peter Costello, “one for the mother, one for the father and one for the country”. But [what] I can say is that people should feel encouraged about the future and the more children that we have across the country, together with our migration, we will build our population growth and that will be good for the economy.“ </blockquote> In the 1940s, Australia held an inquiry into falling birth rates, and following the second world war Australians were called on to populate or perish. During the 1940s inquiry, <a href="https://catalogue.nla.gov.au/catalog/1786445">women were invited to make submissions</a> reflecting how difficult motherhood was and how unsupported they were: "You men in easy chairs say ‘populate or perish’. Well, I have populated and I have perished – with no blankets.” Many Australians now won’t achieve their desired family size because contemporary life is simply not conducive to having children. Having no or fewer children is now a forced outcome for a growing number of Australians. The barriers to having a child are now insurmountable for far too many. Housing affordability, gender inequality, financial insecurity and climate change make for an unstable and uncertain future. Young Australians are carrying the burden of the nation’s future and the burden is simply too much. They have seen the generational bargain crumble and are being denied a future because of the failings of politics past. <h2>Permanent versus net overseas migration</h2> Among the many nuances missing from the population debate is the difference in the terminology used to refer to immigration. From a planning point of view, permanent migration is discussed; from a population perspective, net overseas migration applies. The difference between the two is stark and used in a smoke and mirrors way to hide reality or harm an opponent. Government has much control over permanent migration, little control over net overseas migration. Permanent migration refers to the cap of permanent visas granted. The permanent migration program is reviewed annually by the <a href="https://immi.homeaffairs.gov.au/what-we-do/migration-program-planning-levels">Department of Home Affairs</a> with input from select experts, peak bodies, and government. Permanent migration <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_departments/Parliamentary_Library/Budget/reviews/2023-24/Immigration">has fluctuated over the past ten years</a>, reflecting political point scoring. Under Tony Abbott’s government in 2014-15, permanent migration was just under 190,000. The permanent migration remained in the 180,000s until declining to over 160,000 in 2017-18 under Scott Morrison. Morrison also reduced permanent migration further to around 144,000 in 2021-22. In its final year, the Morrison government flagged increasing the planning level for <a href="https://treasury.gov.au/sites/default/files/2021-06/p2021-182464.pdf">permanent migration to 190,000</a>. Planning levels under the Anthony Albanese government were 195,000 and 190,000 in 2022-23 and 2023-24 respectively. The permanent migration program ceiling is set to decline by 5,000 places to 185,000 in 2024-25 under Albanese. Opposition Leader Peter Dutton has also announced his party would reduce permanent numbers to 140,000, seemingly linking <a href="https://www.liberal.org.au/latest-news/2024/05/16/leader-oppositions-budget-address-reply">housing affordability to permanent migration</a>. Dutton has also said his party would cut net overseas migration (NOM) but has since <a href="https://www.abc.net.au/news/2024-12-08/dutton-walks-back-promise-to-cut-net-migration/10469921">backtracked on his plan</a>, possibly because he realised it couldn’t be done. <blockquote class="twitter-tweet"> Explaining the 2024 Migration Surge A recent surge in net migration has become a hot topic, with politicians & media linking it to housing pressures. But what is Net Migration? And do we really have unusually high volumes of migration? <a href="https://t.co/TjzwbtGqsF">https://t.co/TjzwbtGqsF</a> <a href="https://t.co/aFHXIeC4ay">pic.twitter.com/aFHXIeC4ay</a> — Alan Gamlen (@alangamlen) <a href="https://twitter.com/alangamlen/status/1795721881699664286?ref_src=twsrc%5Etfw">May 29, 2024</a></blockquote> Net overseas migration feeds into population estimates and is the balance of incoming minus outgoing migration. <a href="https://immi.homeaffairs.gov.au/what-we-do/migration-program-planning-levels?fbclid=PAZXh0bgNhZW0CMTEAAaZPBEWLyQJhkvB8_SaqYBSgRdV_rx4Kjy86bbkugYRsOO2cukAoD2wd5dM_aem_AcfxCup1XXR8DP4ZaRfFTFaXggVYw8b8TyNLWsw-3fIenPm_wsx7xM0zfsZHmQ2OjYi0H-YUQdLxUjQUcT47Feij#:%7E:text=Net%20overseas%20migration%20%E2%80%93%20relationship%20with,New%20Zealanders%20and%20Humanitarian%20migrants">NOM is comprised</a> of temporary and permanent migration and includes refugees, students, working holiday makers, and even Australian and New Zealand citizens. A cut to the permanent migration program is unlikely to affect net overseas migration numbers. NOM is set to return to <a href="https://budget.gov.au/content/bp3/download/bp3_14_appendix_a.pdf">recent historical average</a> even without reduced permanent numbers. Most people granted permanency are <a href="https://immi.homeaffairs.gov.au/what-we-do/migration-program-planning-levels?fbclid=IwZXh0bgNhZW0CMTEAAR1aJLdjyJotVfICnc2Ge8vcrJ6DMCaPC4XfDOST9owl1qS4YfBYCKYPkBw_aem_AcegFZW0_vafT8J90jDFyG8aVhMd2f0Ab_9EqE1Y38Q5vuVT5NExZi5Um2BrkpHg0odl0odbI0pDfnUE7A34PRhi">already in the country</a>. What will occur with a reduced migration program is increased temporariness. Increased temporariness has the potential to erode social cohesion, harming migrants and Australian society overall. Just like births, populist tactics are used when talking immigration for quick political point scoring. It works, but is it good for people? <h2>Turning on ourselves</h2> Demography is often used against the population in a peculiar ploy to win political points. Take gender. Fewer birth means less expenditure on paid parental leave and superannuation for those receiving parental leave. Announcing <a href="https://www.abc.net.au/news/2024-05-14/federal-budget-pledges-superannuation-into-paid-parental-leave/103846312">increased</a> paid parental leave benefits and superannuation while knowing births are set to be fewer is political genius. Chalmers announced exactly this in the 2024 budget. <blockquote class="twitter-tweet"> BREAKING: Parliament has just passed our bill to expand Paid Parental Leave to 26 weeks. On top of that, we've announced a plan to pay super on PPL from 1 July 2025 - all part of our efforts to ensure women earn more, keep more of what they earn & retire with more as well <a href="https://twitter.com/hashtag/auspol?src=hash&ref_src=twsrc%5Etfw">#auspol</a> <a href="https://t.co/p3p4ib6sed">pic.twitter.com/p3p4ib6sed</a> — Jim Chalmers MP (@JEChalmers) <a href="https://twitter.com/JEChalmers/status/1769541268739080507?ref_src=twsrc%5Etfw">March 18, 2024</a></blockquote> The government says it’s doing more for women and mothers, but what it’s actually doing is a <a href="https://www.abc.net.au/news/2024-05-20/paid-parental-leave-payments-saving-millions-fertility-rate/103866506">whole lot of nothing</a>. There is no substantive examination of why women are saying no to motherhood. Demographic insights have enabled an effective political sleight of hand to give the illusion of doing something when actually not doing much at all. Blaming population growth for the housing crisis is another stroke of political mastery. Talking tough on population (immigration) while promoting and relying on immigration is a tale as old as Australia’s ageing population. When in opposition the talk is tough; when in government, actions speak louder than words. Governments and oppositions, no matter the political leaning, make promises and then realise immigration is the economic safety raft keep the economy afloat. <a href="https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/speeches/budget-speech-2024-25">Chalmers talked tough</a> on immigration in his 2024 budget speech, pointing the finger of blame towards immigration for all manner of things, <blockquote> […] we’re addressing the pressures caused by population growth, with net overseas migration next year now expected to be half what it was last year. </blockquote> But the government can’t take the credit for lowering NOM – nothing they did lowered the artificially high rates of NOM Australia saw post COVID border reopening. Yes, the Albanese government has introduced changes to <a href="https://www.reuters.com/world/asia-pacific/australia-tightens-student-visa-rules-migration-hits-record-high-2024-03-21/">build integrity</a> into the <a href="https://www.reuters.com/world/asia-pacific/australia-raises-minimum-savings-student-visa-warns-fake-recruitment-2024-05-08/">migration system</a>, but NOM figures were set to decline anyway. It comes down to the way it is calculated. Border closures in Australia saw NOM fall to <a href="https://www.abs.gov.au/statistics/people/population/overseas-migration/2022-23-financial-year">-88,000 in 2020-21</a>. That’s negative nearly 90,000 people. <hr /> <iframe id="datawrapper-chart-9amUU" style="border: none;" title="Overseas migration in Australia from 2014 to 2024" src="https://datawrapper.dwcdn.net/9amUU/1/" width="100%" height="426" frameborder="0" scrolling="no" aria-label="Interactive line chart" data-external="1"></iframe> <hr /> This was the first such decline outside wartime in Australia’s recorded history. A big deal. Temporary migrants, including students, left Australia prematurely at the onset and peak of COVID-related measures. Morrison, prime minister at the time, told international students and temporary visa holders to “go home”, while saying those with critical skills <a href="https://www.abc.net.au/news/2020-04-03/coronavirus-pm-tells-international-students-time-to-go-to-home/12119568">could stay and contribute</a>: “For those backpackers in Australia who are nurses or doctors, or have other critical skills that can really help us during this crisis, then there will be opportunities for them”. Expendability of migrants echoed in this statement. What happened with the NOM during COVID closed borders was essentially a calculation reset. Higher than expected numbers of people left Australia prematurely. Students, especially, left Australia prior to their studies finishing. This resulted in greater outgoings of NOM than the recent average. NOM restarted the moment borders reopened, but because so many brought forward their exit the number of incomers weren’t balanced by the usual outflow of people. Taking a longer view of NOM prior to and since COVID-related measures shows smoother growth than popular media suggests. But nuance is hard to articulate in small soundbites, especially when the language of otherness is so enticing. <h2>Creating the ‘other’</h2> <a href="https://journals.sagepub.com/doi/10.1177/14705958231216936">The language of otherness</a> is used extensively in the population (immigration) narrative. Dutton played population bingo with his use of the word “foreign” in his 2024 budget reply speech referring to students, ending investment, and interference. Dutton also blamed migrants for road congestion and pressure on local services. His speech was a populist symphony. When in opposition, members of the now government also made disparaging comments about migrants. For example, <a href="https://www.smh.com.au/national/do-we-want-migrants-to-return-in-the-same-numbers-the-answer-is-no-20200501-p54p2q.html">Kristina Keneally</a> wrote an opinion piece suggesting migrants were taking jobs from locals. Fear about population is easily manufactured, and once created enables a fix the playmaker can resolve. Much like a David Copperfield magic special. The trouble with these tactics is in the enormous <a href="https://www.abs.gov.au/statistics/people/population/australias-population-country-birth/latest-release">diversity in Australia</a> – we risk turning on ourselves and eroding already fraying social cohesion. <h2>Shaping Australia</h2> Our preoccupation with population largely reflects the central place people and demography hold in the economy and very function of the nation. But we appear to have lost our heads, instead problematising the very heart of what makes us Australian: the people. Demography is a slow-moving train, and based on past and current trends population science can somewhat predict the future. The populist playbook results in population (namely immigration) used for political point scoring, to the detriment of the people, particularly the young. Australia is by no means perfect. There is much work to be done to fix the multiple crises the nation is confronted with – housing affordability, financial insecurity, gender inequality, and climate change. A sensible approach to population and immigration is needed to ensure living standards don’t go backwards. Migrants help us weather the demographic headwinds. Rather than use population for political gain, we need instead to harness the power of demography to solve our way out of the gigantic mess we’re in. The key is ensuring young people have a future worth living. <hr /> This is an edited extract from <a href="https://thamesandhudson.com.au/product/how-australian-democracy-works-and-why-we-need-it-more-than-ever/">How Australian Democracy Works</a>, a new collection of essays from The Conversation on all aspects of the country’s political landscape.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/230409/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> By <a href="https://theconversation.com/profiles/liz-allen-10193">Liz Allen</a>, Demographer, POLIS Centre for Social Policy Research, <a href="https://theconversation.com/institutions/australian-national-university-877">Australian National University</a> This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/population-panic-how-demography-is-used-for-political-gain-230409">original article</a>. Image: Shutterstock </div>

Money & Banking

‘Don’t panic, do prepare’: why it’s not too late to plan for Cyclone Alfred

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/yetta-gurtner-2337172">Yetta Gurtner</a>, <a href="https://theconversation.com/institutions/james-cook-university-1167">James Cook University</a> For millions of people in southeast Queensland and northern New South Wales, Cyclone Alfred will be their first experience living through a cyclone. Alfred is forecast to make landfall about 2am on Friday morning. I am a disaster expert based in northern Queensland, which regularly experiences cyclones. In my other role as an acting SES public information officer, I’m heading south to the Gold Coast to help residents prepare and respond. Here’s what I want you to know. First, don’t panic. Second, do prepare. Preparation has several steps. It’s important to clearly assess your specific threat. If you live near the sea, storm surges – where the sea spills inland – could be a significant threat, while flooding might pose a large risk if you live near a river – especially in the few days after Alfred passes. The highest rainfall is likely on Alfred’s southern flank from the Gold Coast down to northern New South Wales. Having enough food, water and medication is vital. Be ready to evacuate too, in case authorities deem it necessary. Check your local council’s disaster website, disaster apps and stay tuned to the ABC, which will run disaster alerts. <figure><iframe src="https://www.youtube.com/embed/EN_yKcjlF20?wmode=transparent&start=0" width="440" height="260" frameborder="0" allowfullscreen="allowfullscreen"></iframe><figcaption>The Bureau of Meteorology’s latest update on Cyclone Alfred’s path and likely impact, as of the morning of Wed 5th March.</figcaption></figure> <h2>What should I do right now?</h2> If you’re in the <a href="http://www.bom.gov.au/products/IDQ65002.shtml">danger zone</a>, make preparations now, before the full intensity of the cyclone arrives. Tie down loose objects. Clean gutters to avoid overflow from torrential rain. And prepare your “go bag” – a bag of essentials you can throw in the car if authorities tell you to leave immediately. Don’t take too much – just the bare necessities. Buy an AM/FM radio and tune it to ABC National, as you cannot be sure mobile networks will function. Radio is a reliable way to get good information from the ABC, Australia’s designated <a href="https://www.abc.net.au/emergency">emergency channel</a>. Make sure the car is fuelled or charged. If you’ve got a generator, make sure you have fuel and the generator is positioned outside in a well-ventilated area. Water is often unreliable after disasters. Fill your bathtub or front-loader washing machine with water. Put containers of water in your freezer, to keep food cold if the power goes out and as another water source. Plan for days of power outages. Protect windows with plywood, heavy blankets or mattresses. Put a mattress between your car and garage roller door to stop it blowing in. Turn off gas, electricity and solar power. Authorities recommend using sandbags to reduce the chance of water getting in. You can get sacks from hardware stores or council-run emergency centres, if available, who also provide sand. You also need plastic sheeting. If there’s a shortage of sand, you can use garden soil or commercial bagged soil. If you can’t get sacks, large plastic shopping bags will do. Tape strong plastic sheeting around the door or low window where water might get in. This is the barrier that actually keeps water out – sandbags keep it in place. Fill sandbags and lay them <a href="https://www.ses.nsw.gov.au/during-emergency/sandbags">like bricks</a>. Lay one row, and lay the next row offset for strength. Sandbags are good, but they have limits. There’s little point in piling sandbags higher than about 30 centimetres. If floodwaters edge higher, water will get through. Many people have had the unpleasant experience of having effluent come back up through toilets during cyclones and subsequent flooding. To stop this, cover your toilet with plastic sheeting (directly on the porcelain) and put a sandbag on top for weight. Do the same for any drains where water might flow back up. To reduce water damage, put valuable or important items up high, atop tables or bunk beds or upstairs if you have a second storey. <h2>What will it be like when Alfred hits?</h2> When the cyclone first hits, it can be overwhelming. The sound is like a roaring jet engine. If you haven’t been advised to evacuate by authorities, you will be sheltering in place. This means finding the safest room in the house, to avoid damage from flying objects. Choose the smallest room with the fewest windows – a bathroom or a room under the stairs. Basements are very safe, but will be the first affected by water. As the cyclone picks up intensity, set up inside this safe room with your pets and children. Do not leave this room until you have been told it’s safe by authorities. At the centre of strong cyclones is the eye of the storm, which we experience as a period of sudden calm. People often make the mistake of thinking it’s over. But in fact, it’s just a brief reprieve before the intense winds pick up again. Don’t make the mistake of leaving the house – check with authoritative sources. Cyclone Alfred is a <a href="https://www.abc.net.au/news/2025-03-05/cyclone-alfred-unusual-triplet-storm-climate-change-factors/105008704">slow-moving cyclone</a>, which means you might be stuck inside for a while. Be prepared to be inside your house for up to 24 hours, even after the worst has passed. This is because there may well be downed powerlines with live electricity, broken glass, falling trees and so on. For your children (and yourself), being in the cyclone is frightening. Young kids find the sound chilling. You can play music through headphones to help soothe them. Board games, books and puzzles can help pass the time. You will need distraction. Have a bucket in the corner for emergency toilet needs. Keep track of the storm and any emerging dangers through your radio and internet-enabled phone (if still functioning). <h2>What if I have to evacuate?</h2> Authorities are working to set up evacuation centres for people whose homes may not be safe. Authorities will go door-to-door to tell affected residents to leave, as well as broadcasting the information on radio and online. You’re more likely to have to evacuate if your house is on low-lying land near the sea, as a storm surge is likely. How much water is pushed ashore will depend on the tide, but it could be as high as 70cm above the high tide line if we’re unlucky. Evacuations can happen after the cyclone too. Alfred is packing a lot of rain – <a href="https://www.weatherzone.com.au/news/tropical-cyclone-alfred-could-disrupt-afl-and-nrl-matches/1890420">up to a metre</a> in some areas. That’s very likely to cause flooding, both flash floods and rivers breaking their banks. If you are asked to evacuate, you can go to the house of a friend or family member if it’s on higher ground and outside the flood risk zones. Or you can go to a local evacuation centre – check your council website to see where your closest one is. Take as little as possible with you. Many people who choose not to evacuate do so because they’re worried about their pets. This is risky. Some evacuation centres do take pets, so check now. If they don’t, look for other options with friends and family. Staying put after an evacuation order is dangerous. <h2>What will happen after the cyclone?</h2> Cyclone Alfred brings three threats: intense winds, high seas and heavy rain. After the intense winds die down, the seas will be dangerous for days after Alfred. There are coastal hazard warnings for about 1,000km of coastline. Cyclones also often decay into tropical low weather systems, which dump heavy rain for days. This is likely. As you move into recovery phase, don’t relax your guard. In far north Queensland, 16 people have <a href="https://www.abc.net.au/news/2025-03-04/melioidosis-death-toll-rises-in-queensland/105009772">now died</a> after being infected with melioidosis, a bacterium found in mud. The bug is <a href="https://theconversation.com/theres-an-outbreak-of-melioidosis-in-north-queensland-heres-what-to-know-about-this-deadly-mud-bug-250392">more prevalent</a> after heavy rainfall. Wear protective gear such as gloves and face masks when dealing with water-damaged goods and mud, and pay close attention to the latest advice authorities are giving. But remember – don’t panic. We will get through this.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/251463/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/yetta-gurtner-2337172">Yetta Gurtner</a>, Adjunct Senior Lecturer, Centre for Disaster Studies, <a href="https://theconversation.com/institutions/james-cook-university-1167">James Cook University</a> Image credits: LUKAS COCH/EPA-EFE/Shutterstock Editorial This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/dont-panic-do-prepare-why-its-not-too-late-to-plan-for-cyclone-alfred-251463">original article</a>. </div>

Travel Trouble

Raygun's brother charged with financial crime

The brother of Australian Olympian Rachael Gunn, also known as Raygun, has been changed with a financial crime. Brendan Gunn faced Sydney Downing Centre on Wednesday after being charged for allegedly dealing with money that was the proceeds of crime. The Australian Securities and Investments Commission (ASIC) alleged he dealt with more than $100,000 in money or property that was reasonable to suspect were the proceeds of crime between March 2020 and May 2020, while director of Mormarkets: a role he has held since 2019. Brendan allegedly dealt with two bank cheques, which contained four investments totalling $181,000, by three investors who deposited the funds to convert to cryptocurrency. He went on to open several bank accounts to receive and transfer deposits on an ongoing basis, which were later closed due to concerns about scams. Brendan is facing a maximum penalty of three years' imprisonment, a $37,800 fine or both. ASIC chair Joe Longo said this case reflected his commitment to pursue those who are allegedly involved in facilitating cross-border scams targeting Australian investors. "ASIC continues to prioritise scam prevention and detection activity to protect consumers," he said in a statement. "We will continue to partner with international law enforcement organisations and investigate and take action where we see misconduct." Image credits: LinkedIn/Paul Kitagaki, Jr/ZUMA Press Wire/Shutterstock

Legal

12 dead in mass poisoning at ski resort

The bodies of 12 people have been found dead in a luxury ski resort in Georgia after a suspected carbon monoxide poisoning. The bodies of 11 Indian nationals and one Georgian national were discovered on Saturday at a ski resort in Gudauri, in the north of the Caucasus country, according to local police. Authorities confirmed that “preliminary tests do not indicate any trace of violence on the bodies,” which were found on the second floor of a building housing an Indian food restaurant at the ski resort. “An oil-powered generator was turned on after the building lost electricity” on Friday, police said, which is believed to be the source of the poisoning. The identities of the victims were not immediately released but they are presumed to be employees of the restaurant, according to the Georgian Interior Ministry. The deaths are being treated as negligent manslaughter, as autopsies have been ordered to determine the actual cause of death, while authorities have opened an investigation into the incident. The Indian Embassy in Georgia's capital of Tbilisi said it was "committed to providing all possible support" to the bereaved families and that it was working to repatriate the bodies of the 11 Indian nationals. Gudauri, lodged high up in the Caucasus Mountains close to the border with Russia, is becoming increasingly popular with tourists, offering a cheaper alternative to Europe's main resorts in the Alps. Image credits: Shutterstock

Travel Trouble

Many people don’t get financial advice even though it can help ensure a comfortable retirement

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/antonia-settle-1019551">Antonia Settle</a>, <a href="https://theconversation.com/institutions/monash-university-1065">Monash University</a> Many Australians, particularly those on lower incomes, are often characterised as <a href="https://www.mpmwm.com.au/latest-news/50475">lacking knowledge or interest</a> in superannuation. <a href="https://www.superannuation.asn.au/wp-content/uploads/2024/09/Research-Note-Survey-on-superannuation-and-retirement-Advice-Sept-2024.pdf#_msdynmkt_linkid=48e751d5-debe-4eb2-9309-4bc96b01930a">Research</a> by the Association of Superannuation Funds of Australia (ASFA) confirms this. It found only 51% have sought any sort of financial advice before retiring. Financial advice plays a critical role in helping people maximise their super. But most of us don’t seek professional guidance. To make matters worse, <a href="https://www.theaustralian.com.au/business/wealth/retirement-and-superannuation-questions-not-being-asked/news-story/cc2142c3b32c706ea6ff1dc99dab62a5">superannuation experts</a> say those with small amounts of super are the least likely to seek it. <h2>Financial literacy</h2> The failure of households to approach super like experienced asset managers is often attributed to <a href="https://treasury.gov.au/sites/default/files/2021-02/p2020-100554-ud00b_key_obs.pdf">poor financial literacy</a>. Better <a href="https://www.investopedia.com/terms/f/financial-literacy.asp#:%7E:text=%25%2025%25%200%25-,What%20Is%20Financial%20Literacy%3F,management%2C%20budgeting%2C%20and%20investing.">knowledge</a>, it is often reasoned, would help lower income households make financially savvy decisions. This would help give them a better chance of achieving a comfortable retirement. Getting professional advice about managing retirement savings is a first step towards knowing what you don’t know. Learning to trust independent advice can optimise risk and returns, even if those decisions conflict with our instincts. ASFA <a href="https://www.superannuation.asn.au/wp-content/uploads/2024/09/Research-Note-Survey-on-superannuation-and-retirement-Advice-Sept-2024.pdf#_msdynmkt_linkid=48e751d5-debe-4eb2-9309-4bc96b01930a">research</a> found while trust in super funds was relatively high, only 12% sought information or advice from the funds. <h2>Career interruptions</h2> Some households might have little superannuation because their hourly wages are low and they have long breaks from the workforce. This might be due to raising children, personal illness or caring for others. Instead of being able to rely on public healthcare or pay others to provide this support, they are required to reduce or abandon paid work to do it themselves. This group consists overwhelmingly of <a href="https://www.wgea.gov.au/publications/superannuation-gender-pay-gaps-by-age-group">women</a> They are also unlikely to have benefited from high employer contribution rates, such as those of <a href="https://www.csc.gov.au/Members/Funds-and-products/PSSap">federal public servants</a> or university employees, who have long earned a standard 17%. <h2>Tax and other benefits</h2> Low balance households are also unlikely to have paid large sums into super to avoid income tax. <a href="https://www.apra.gov.au/news-and-publications/apra-releases-superannuation-statistics-for-june-2024">One in every four dollars</a> contributed to super is deposited as voluntary contributions, which attract a low tax rate. But most of these low tax contributions are made by <a href="https://australiainstitute.org.au/wp-content/uploads/2024/06/P1527-Who-benefits-The-high-cost-of-super-tax-concessions-Web-1.pdf">the 20%</a> with the highest incomes. In fact, with <a href="https://povertyandinequality.acoss.org.au/inequality/">70% of superannuation assets owned by the wealthiest 20% of households</a>, low balance households have relatively little to gain. Research shows those with the <a href="https://melbourneinstitute.unimelb.edu.au/__data/assets/pdf_file/0008/4630688/ri2023n03.pdf">lowest balances</a> believe superannuation is a largely a tool for high income earners to avoid tax. And while financial advice will always be more useful to those who are able to use <a href="https://www.commbank.com.au/articles/tax/five-ways-to-save-tax-using-superannuation.html">super as a tax minimisation strategy</a>, even for low-balance households – getting financial advice is worthwhile. Financial advice can help households choose investments that optimise the risk/return profile of superannuation at each stage of the life cycle. It can help avoid unnecessary fees and taxes and help people make the best decisions about <a href="https://www.investopedia.com/terms/d/drawdown.asp#:%7E:text=A%20drawdown%20in%20retirement%20is,known%20as%20a%20drawdown%20percentage.">spending in retirement</a> so they can get the most out of their super. <h2>Potential sticking points</h2> The <a href="https://www.royalcommission.gov.au/banking#:%7E:text=The%20Royal%20Commission%20into%20Misconduct,into%20misconduct%20in%20the%20banking%2C">2017 royal commission</a> into banking and finance misconduct revealed major conflicts of interest in the advice sector. This only made some people more wary about trusting a stranger with their life savings. At between $4,000 and $12,000 for a <a href="https://www.moneymag.com.au/financial-planning/learning/how-much-does-financial-advice-cost">personal financial plan</a>, independent financial advice is not cheap. There is free counselling to manage debts but there is no free, independent advice for longer-term financial planning. Recent <a href="https://ministers.treasury.gov.au/ministers/stephen-jones-2022/media-releases/government-unveils-comprehensive-financial-advice">regulatory efforts</a> to better position superannuation funds to provide free financial advice to households will improve access for many. But these efforts won’t resolve the conflict of interest issue, given there is little incentive for funds to suggest investment strategies using other providers. This is particularly important during the <a href="https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/retirement-withdrawal-lump-sum-or-income-stream">draw down phase</a>. This is where people start using their super which they receive as either a lump sum or income stream. The products offered by any single super fund to set this up are limited. Superannuation balances can be seriously eroded by <a href="https://www.ato.gov.au/calculators-and-tools/super-yoursuper-comparison-tool">unnecessary fees</a>, inappropriate investments and poorly planned <a href="https://www.superguide.com.au/in-retirement/minimum-pension-payments-reduced">draw down</a> strategies. This is particularly damaging when low balances are involved. <h2>Facing poverty in retirement</h2> As a result, failure to seek financial advice can increase the risk of elderly poverty, especially if people retire without having bought or paid off a home. Any savings that can be preserved can make a meaningful difference to the capacity of such households to have a dignified retirement. For these reasons, access to free and independent advice is critically important for the superannuation system to better serve low-balance households. But free, independent advice is still not available in the superannuation system. It is not surprising low-balance households are reticent to engage in super given the lack of accessible advice. But the peripheral role of low-balance households in a system dominated by Australia’s wealthiest households may play a role in that reticence as well.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/240207/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/antonia-settle-1019551">Antonia Settle</a>, Lecturer, <a href="https://theconversation.com/institutions/monash-university-1065">Monash University</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/many-people-dont-get-financial-advice-even-though-it-can-help-ensure-a-comfortable-retirement-240207">original article</a>. </div>

Money & Banking

Foreign victims killed in mass methanol poisoning identified

The victims of the mass methanol poisoning in Laos have been identified, with the death toll now rising to six. Danish women Anne-Sofie Orkild Coyman, 20, Freja Vennervald Sorensen, 21, and American man James Louis Hutson, 57, were among those who died after a group of backpackers consumed alcoholic drinks spiked with methanol in the party town of Vang Vieng. Bianca Jones and Holly Bowles, both 19, had already been named as two Melbourne teenagers who lost their lives last week while on their gap year, along with British woman Simone White, 28. Ms Jones and Ms Bowles were staying at Nana Backpackers Hostel, which has been closed since November 14th, just days after the incident occurred. It is understood that the two Danish and American victims were also staying at Nana Backpackers Hostel. Ms Coyman and Ms Sorensen were reportedly found unconscious on the bathroom floor on November 13th after they had been out drinking the night before. Mr Hutson was reportedly found unconscious in his bed on November 13th after staff noticed he had not come out of his room. All three tourists died in the following days in hospital. Dr Yaher, who first treated Ms Bowles in Vang Vieng, claimed she went from a state of confusion to a coma in just half an hour after consuming the methanol-laced beverage. The doctor told The Times she was confused and fatigued, and didn’t know what had happened when she arrived at his small one-storey hospital at 2am. “We treated her symptomatically,” he told the publication. “We put her on an IV drip and gave her vitamins. But after 30 minutes she had a seizure and went into a coma. I was so surprised. We gave her CPR, because she had difficulty breathing, and we intubated her and referred her to Vientiane.” The Laos government released a statement on Saturday expressing sympathy and condolences to the families of the tourists who died, saying an investigation was underway and promised to “bring the perpetrators to justice according to the law”. Image credits: Facebook

Travel Trouble

The financial reality check after a major diagnosis

Once you have received and processed your doctor’s diagnosis, take stock of the situation, because this will determine how you respond and what resources you have available to support you going forward. Who received the diagnosis – you or your spouse (if you have one)? Is it a terminal illness, chronic condition or treatable setback? If you are not yet retired, will you be able to keep working, need a period off work or will this bring forward your retirement? If leaving work temporarily, what are your prospects for re-entering the workforce? Will your partner need to leave their work to care for you (or vice versa)? Once you have clarified and considered this, spring into action as soon as possible. Revisit your spending Healthcare is expensive by any measure. Pensioners and healthcare card holders may get much or all of your treatment covered, but waiting times in the public system can be lengthy. For self-funded retirees, even with private health insurance, there can be considerable out-of-pocket costs: specialist visits, diagnostics, symptom management, physiotherapy and so on. Depending on the type of diagnosis, you may also need to modify your home (install ramps, railings etc.) and/or obtain specialist furniture and equipment. Then comes care requirements – private nurses, retirement living, hospice or palliative care. Your lifestyle may also change, and quickly. Your clothes and shoes may no longer fit if you lose weight rapidly. You may no longer be able to drive. You may need help with household chores – cleaning, cooking, gardening. Covering these requires money if you don’t have family and friends able to lend a helping hand. Carefully look at what supports your new reality demands and whether they will be one-off or ongoing expenses. Some things will need to be purchased, others could be hired to split the cost over the longer term. Secure your income Once you’ve established the impact on your ability to work and your spending needs, determine how you will pay for everything going forward. Your emergency fund can provide short-term cash if you need to stop working suddenly or fork out for large, unexpected bills. Depending on your age and circumstances, it may be worth bringing forward your retirement – allowing you to draw income from superannuation and focus more on your (or your partner’s) health. Check your insurances to see what claims you could make – having paid the premiums, now is the time make use of them. Relevant insurances include total permanent disability, income protection, trauma or critical illness cover. Meanwhile some life insurance policies may pay out based on a specialist’s diagnosis, unlocking much-needed funds sooner. Depending on your diagnosis, policy and the type of insurance, payouts may be a lump sum or smaller payments spaced out over time. Update your estate plans A major diagnosis typically elicits thoughts about mortality, legacy and how you want your loved ones to be provided for. Crucially, it may also influence factors such as guardianship of minors and pets while you are unwell/in hospital, Power of Attorney to cover important legal and financial decisions if you are incapacitated, and palliative care arrangements if required. Before heavy medications, surgeries or further deterioration of your health cloud your judgement, ensure your will and estate plans are updated to fully reflect your current needs and wishes. Look after yourself Stress, shock, anger and despair are common emotions to feel when faced with a major diagnosis. As such, it’s important you look after your mental and emotional wellbeing too. It needn’t cost a cent – you could look to free counselling services available such as Lifeline and Beyond Blue; a daily walk by the beach or through the local park; catching up with loved ones for support and companionship. Keeping your spirits up, as much as you can under the circumstances, can improve your quality of life while also helping you make clearer decisions about your health, finances and relationships – making it arguably the best investment of all. Back that up with sound legal, tax and financial advice. There is much to consider where insurance, superannuation, inheritances, Centrelink and more are involved, and you can’t know everything – especially when your focus is rightly elsewhere! Helen Baker is a licensed Australian financial adviser and author of On Your Own Two Feet: The Essential Guide to Financial Independence for all Women. Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at <a href="http://www.onyourowntwofeet.com.au/">www.onyourowntwofeet.com.au</a> Disclaimer: The information in this article is of a general nature only and does not constitute personal financial or product advice. Any opinions or views expressed are those of the authors and do not represent those of people, institutions or organisations the owner may be associated with in a professional or personal capacity unless explicitly stated. Helen Baker is an authorised representative of BPW Partners Pty Ltd AFSL 548754. Image credits: Shutterstock

Money & Banking

10 signs you’re not on the right financial path

Dreaming of owning a big house, nice car and a boat? Or just having enough cash to be comfortable? Here are 10 signs that you are not (yet) on the path to financial freedom. 1. You don't think about ways to make extra money If you are paid a salary and nothing more, you are limited in the ways you can get ahead. The only way to save is to spend less. But if you switch it up and start to look for ways to earn more, your horizons open up. Most of the world's super wealthy have more than one income stream – some of which are usually passive, requiring no regular input. This could be something such as rental income from an investment property or the sale of a product such as an ebook. Add in some sensible savings habits and you will be on your way. 2. You leave your savings in a savings account If you stick your cash in a savings account, it is basically doing nothing. You are better to look at ways to put that money to work. You could put it in a managed fund, buy shares or even lend it out via a peer-to-peer platform, to get a better return. Make sure you get good advice to understand what you are doing. 3. You borrow to buy Borrowing to buy a house is fine. Borrowing to buy a car is (generally) not. If you are putting all your purchases on finance or credit card and paying them off with high rates of interest, you are pouring money down the drain. Live within your means if you want to get rich. 4. You don't know where your money goes The first step to getting on the right track is to have a clear idea of what you're spending money on. If you don't know, chances are you're wasting it. Have a look through your recent bank statements, draw up a budget. Stamp out some discretionary spending and you'll have more of that money to put to work that we mentioned earlier. 5. You're putting off planning for your retirement If you think you are too young to have to worry about the future, you are doing yourself a huge disservice. When you are working towards a long-term financial goal, such as retirement, time is a huge asset to have on your side. The power of compounding means that any returns you make in a vehicle such as your KiwiSaver account then attract their own returns, over and over each year until you withdraw the money. The later you start saving, the more of that compounding power you miss. 6. You hate risk It is great to be careful with your money but if you never take a risk, you miss out on returns. Over the long term, the biggest gains are usually from riskier investments, such as equities. You may also find ways to wealth by getting out of your comfort zone. Quitting your job and starting a new business is risky and scary, but could pay off if you have planned it well and know your stuff. 7. You don't have a plan If you don't know how you're going to get rich, it probably isn't going to happen. Write down your goals. What do you want to achieve this week, month and year? What about in 10 years? If you can, identify someone who is in a position you'd like to get to and find out what they did to get there. Work out what you need to do to follow suit and break it down into small, achievable steps. 8. You don't pay yourself first If you have decided to save money and think you'll just put aside everything that is left in your account at the end of the month, you will be horribly disappointed. This method almost always fails because there is invariably nothing left. Pay yourself first. Using your budget and plan, put aside the amount that you have worked out you can afford to save as soon as you get paid, and then live off the rest. 9. You think you're bad with money It's a self-fulfilling prophecy. If you think you are bad with money, you won't pay any attention to your finances and they will get out of control. Stop thinking money is some sort of secret club that you could not possibly understand. Everyone can get a handle on it. 10. You don't know the basics But having said that, it's important to get a good knowledge of the basic stuff. If you are not clear how your credit card works, or how your mortgage interest is calculated, get someone to help you break it down and bust the jargon. Websites such as Sorted have good tools or you can seek financial advice from your bank or an adviser. Image credits: Shutterstock Written by Susan Edmonds. First appeared on <a href="http://www.stuff.co.nz/" target="_blank" rel="noopener">Stuff.co.nz</a>.

Money & Banking

More Australians are using their superannuation for medical procedures. But that might put their financial health at risk

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/neera-bhatia-15189">Neera Bhatia</a>, <a href="https://theconversation.com/institutions/deakin-university-757">Deakin University</a> A record number of Australians are accessing their superannuation early on compassionate grounds, mainly to fund their own medical procedures – or those of a family member. Some 150,000 Australians have used the scheme in the last five years. Nearly 40,000 people <a href="https://www.ato.gov.au/about-ato/research-and-statistics/in-detail/super-statistics/early-release/compassionate-release-of-super">had applications approved</a> in 2022-23, compared to just under 30,000 in 2018-19 – an increase of 47%. Some people think this flexible use of funds is a good way to ensure people can fund their own medical needs. But more transparency and better oversight is needed. <h2>What are compassionate grounds?</h2> Since July 2018, the Australian Tax Office has administered the early release of superannuation – meaning before <a href="https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/super-withdrawal-options#Preservationage">retirement</a> – under certain circumstances, including compassionate grounds. <a href="https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/access-on-compassionate-grounds/expenses-eligible-for-release-on-compassionate-grounds">Compassionate grounds</a> for you or your dependant (such as child or spouse) are: <ul> <li>medical treatment or transport</li> <li>modifying your home or vehicle to accommodate special needs for a severe disability</li> <li>palliative care for a terminal illness</li> <li>death, funeral or burial expenses</li> <li>preventing foreclosure or forced sale of your home.</li> </ul> The medical treatment must be for a life-threatening illness or injury, or to alleviate acute or chronic pain, or acute or chronic mental illness. The treatment cannot be “readily available” through the public system. Cosmetic procedures are excluded. You also have to prove you cannot afford to pay part or all of the expenses without accessing your super, for example, by spending your savings, selling assets or getting a loan. People who can access other funding for the expense, such as via the <a href="https://theconversation.com/lists-of-eligible-supports-could-be-a-backwards-step-for-the-ndis-and-people-with-disability-236578">National Disability Insurance Scheme</a>, are ineligible. <h2>Why are people using this scheme more?</h2> The ATO has not explained what is driving the surge. General cost-of-living pressures may play a role. People may have fewer savings to draw on for medical procedures. But the treatments most commonly being accessed using superannuation – fertility treatments, weight loss surgeries and dental care – point to other systemic issues. There have long been issues with IVF and <a href="https://theconversation.com/why-isnt-dental-included-in-medicare-its-time-to-change-this-heres-how-239086#:%7E:text=The%20real%20reason%20dental%20hasn,has%20a%20structural%20budget%20problem.">dental care</a> not being readily available or funded in the public health system. Weight loss surgeries (including <a href="https://www.mayoclinic.org/tests-procedures/bariatric-surgery/about/pac-20394258">bariatric surgery</a>) can help combat potentially life-threatening conditions such as heart disease. Recent <a href="https://www.monash.edu/news/articles/fewer-australians-having-bariatric-surgery-monash-university-led-report">research</a> suggests there has been an overall drop in the number of Australians having bariatric surgeries since 2016. But of those, 95% are performed through the private system. While early access to super can provide individuals access to critical treatment, there are issues with how compassionate grounds are defined and regulated. <h2>Lack of clarity</h2> As my co-author and I <a href="https://www.unswlawjournal.unsw.edu.au/wp-content/uploads/2021/06/Issue-442-PDF-3-Bhatia-and-Porceddu.pdf">have shown</a>, the vague wording of the <a href="https://www.legislation.gov.au/F1996B00580/2022-09-28/text">Superannuation Industry regulations</a> leaves them worryingly open to interpretation. For example, the meaning of “mental disturbance” is not defined. You may not meet the criteria of having an acute or life-threatening illness, or acute or chronic pain. But if you can show a certain condition causes you acute mental disturbance, you may qualify to release your superannuation early. People accessing their superannuation for IVF use this criterion, for example, by arguing they need to access funds to continue treatment and alleviate the acute mental distress caused by ongoing infertility issues. Two registered medical practitioners are each required to submit a report demonstrating the treatment is needed, and one must be a specialist in the field in which the treatment is required. However, the regulations do not specify clearly that the specialist should have relevant qualifications. In the IVF example, this means the specialist opinion can be provided by a fertility doctor rather than a mental health expert – and that person may stand to profit if they later also provide treatment. <h2>A closed-loop system</h2> Conflict of interest is another major issue. There is nothing in the regulations to stop a medical practitioner – such as a dentist – being involved in all steps and then financially benefiting. They could encourage a patient to access superannuation for a treatment, write the specialist report and then also receive payment for the treatment. Some clinics <a href="https://www.theguardian.com/australia-news/2024/apr/06/online-ads-promote-simple-access-to-super-to-pay-for-healthcare-despite-strict-rules">promote</a> accessing superannuation as an option to pay for expensive treatments. This raises important questions about the independence of the process, as well as professional ethics. Medical practitioners making recommendations for early release of superannuation should be doing so on genuinely compassionate grounds. But the potential for exploitation remains an ethical concern, when a practitioner can financially benefit from recommending early access to nest egg funds. Transparency around potential <a href="https://theconversation.com/people-are-using-their-super-to-pay-for-ivf-with-their-fertility-clinics-blessing-thats-a-conflict-of-interest-161278">conflicts of interest</a> are impossible to ensure without proper oversight. <h2>What is needed?</h2> 1. Mandatory financial counselling The ATO <a href="https://www.theage.com.au/healthcare/worrying-trend-record-number-of-australians-raid-super-to-fund-medical-treatments-20240920-p5kc44.html">has warned</a> accessing super early is not “free money”, with a spokesperson urging people to get financial advice. But the law should go a step further and make this compulsory. That way people making decisions during an emotionally charged moment can understand any future implications. 2. Tightening of the criteria Greater clarity in the legislation – such as defining “mental disturbance” – would help prevent loopholes being exploited. 3. Better oversight Less health-care industry involvement would promote greater transparency and independence. An independent body of medical practitioners could assess applications rather than practitioners who could financially benefit if applications are approved. This would help alleviate perceived and actual conflicts of interest. Accessing superannuation early may be the only option for some people to start a family or access other life-changing medical care. But they should be able to make this decision in a fully informed way, safeguarded from exploitation and aware of the implications for their future.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/239588/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/neera-bhatia-15189">Neera Bhatia</a>, Associate Professor in Law, <a href="https://theconversation.com/institutions/deakin-university-757">Deakin University</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/more-australians-are-using-their-superannuation-for-medical-procedures-but-that-might-put-their-financial-health-at-risk-239588">original article</a>. </div>

Money & Banking

Retirement doesn’t just raise financial concerns – it can also mean feeling unmoored and irrelevant

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/marianne-janack-681018">Marianne Janack</a>, <a href="https://theconversation.com/institutions/hamilton-college-2966">Hamilton College</a> Most discussions of retirement focus on the financial aspects of leaving the workforce: “<a href="https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/top-10-ways-to-prepare-for-retirement.pdf">How to save enough for retirement</a>” or “<a href="https://www.businessinsider.com/personal-finance/investing/when-can-i-retire">How do you know if you have enough money for retirement</a>?” But this might not be the biggest problem that potential retirees face. The deeper issues of meaning, relevance and identity that retirement can bring to the fore are more significant to some workers. Work has <a href="https://www.theatlantic.com/ideas/archive/2023/03/work-revolution-ai-wfh-new-book/673572/">become central to the modern American identity</a>, as <a href="https://www.theatlantic.com/atlantic-editions/">journalist Derek Thompson bemoans</a> in The Atlantic. And some theorists have argued that work shapes what we are. For most people, as business ethicist <a href="https://www.luc.edu/quinlan/faculty/algini.shtml#:%7E:text=About,the%20Society%20for%20Business%20Ethics.">Al Gini</a> argues, one’s work – which is usually also one’s job – <a href="https://doi.org/10.4324/9780203950555">means more than a paycheck</a>. Work can structure our friendships, our understandings of ourselves and others, our ideas about free time, our forms of entertainment – indeed our lives. I <a href="https://www.hamilton.edu/academics/our-faculty/directory/faculty-detail/marianne-janack">teach a philosophy course about the self</a>, and I find that most of my students think of the problems of identity without thinking about how a job will make them into a particular kind of person. They think mostly about the prestige and pay that come with certain jobs, or about where jobs are located. But when we get to <a href="https://plato.stanford.edu/entries/existentialism/">existentialist philosophers</a> such as <a href="https://plato.stanford.edu/entries/sartre/">Jean-Paul Sartre</a> and <a href="https://plato.stanford.edu/entries/beauvoir/">Simone de Beauvoir</a>, I often urge them to think about what it means to say, as the existentialists do, <a href="https://philosophynow.org/issues/115/On_Being_An_Existentialist">that “you are what you do</a>.” How you spend 40 years of your life, I tell them, for at least 40 hours each week – the time many people spend at their jobs – is not just a financial decision. And I have come to see that retirement isn’t just a financial decision, either, as I consider that next phase of my life. <h2>Usefulness, tools and freedom</h2> For Greek and Roman philosophers, <a href="https://search.worldcat.org/title/Work-what-it-has-meant-to-men-through-the-ages/oclc/780872063">leisure was more noble than work</a>. The life of the craftsperson, artisan – or even that of the university professor or the lawyer – was to be avoided if wealth made that possible. The good life was a life not driven by the necessity of producing goods or making money. Work, Aristotle thought, was an obstacle to the achievement of the particular forms of excellence characteristic of human life, like thought, contemplation and study – <a href="https://classics.mit.edu/Aristotle/nicomachaen.7.vii.html">activities that express</a> the <a href="https://classics.mit.edu/Aristotle/nicomachaen.8.viii.html">particular character of human beings</a> and are done for their own sake. And so, one might surmise, retirement would be something that would allow people the kind of leisure that is essential to human excellence. But contemporary retirement does not seem to encourage leisure devoted to developing human excellence, partly because it follows a long period of making oneself into an object – something that is not free. German philosopher Immanuel Kant distinguished between the value of objects and of subjects by the idea of “use.” Objects are not free: They are meant to be used, like tools – their value is tied to their usefulness. But rational beings like humans, who are subjects, are more than their use value – <a href="https://search.worldcat.org/title/5796114">they are valuable in their own right</a>, unlike tools. And yet, much of contemporary work culture encourages workers to think of themselves and their value <a href="https://www.simonandschuster.com/books/Bullshit-Jobs/David-Graeber/9781501143335">in terms of their use value</a>, a change that would have made both Kant and the ancient Greek and Roman philosophers wonder why people didn’t retire as soon as they could. <h2>‘What we do is what we are’</h2> But as one of my colleagues said when I asked him about retirement: “If I’m not a college professor, then what am I?” Another friend, who retired at 59, told me that she does not like to describe herself as retired, even though she is. “Retired implies useless,” she said. So retiring is not just giving up a way of making money; it is a deeply existential issue, one that challenges one’s idea of oneself, one’s place in the world, and one’s usefulness. One might want to say, with Kant and the ancients, that those of us who have tangled up our identities with our jobs have made ourselves into tools, and we should throw off our shackles by retiring as soon as possible. And perhaps from the outside perspective, that’s true. But from the participant perspective, it’s harder to resist the ways in which what we have done has made us what we are. Rather than worry about our finances, we should worry, as we think about retirement, more about what the good life for creatures like us – those who are now free from our jobs – should be.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/233963/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/marianne-janack-681018">Marianne Janack</a>, John Stewart Kennedy Professor of Philosophy, <a href="https://theconversation.com/institutions/hamilton-college-2966">Hamilton College</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/retirement-doesnt-just-raise-financial-concerns-it-can-also-mean-feeling-unmoored-and-irrelevant-233963">original article</a>. </div>

Retirement Income

Brave bystanders praised after mass Sydney stabbing

New details have emerged after multiple people were stabbed following a car crash in Sydney's south, on Sunday. Emergency crews were called to the intersection of Princes Highway and Old Bush Road at about 9am after receiving several triple zero calls about a crash. A 58-year-old man, who was known to police for "a number of matters" and suspected of carrying out the wild attacks, was allegedly found running from the scene by officers. He was later pursued on foot, tasered and taken into custody, and remains in Liverpool Hospital in serious condition, as he appeared to have inflicted a number of injuries to himself before the police arrived. A policeman was also injured during the arrest after the alleged offender stabbed him on his arm. A woman in her 40s, was allegedly being assaulted by the man as he drove, and is believed to be the partner of the alleged offender. “They were in a domestic relationship, there is no history that we are aware of, there is no apprehended violence orders between the two but definitely domestic related,” Superintendent Donald Faulds told a press conference on Sunday afternoon. “We believe the female was being assaulted in the car while the male was driving the vehicle at the same time. “A number of witnesses mentioned the car was driving quite erratically at the time and we believe that’s when the assault was occurring in the car and as result they then collided with another vehicle.” The female passenger was transported to hospital and is in a critical condition. Three other people were also injured, after they had rushed over to the accident to help. It is alleged that he had a box-cutter. “A number of members of the community stopped to assist occupants from both those vehicles,” the Superintendent said. “As community members were assisting one of the females out of one vehicle, a male got out of that vehicle. He was armed with what we believe to be a box cutter.” One witness reportedly told radio station 2GB that he saw a man get out of the car appearing to be armed with a box cutter, yelling “I’m going to kill you”. A NSW spokesman said of those injured, one male patient had sustained slash wounds to his arms and his neck and has been taken to Liverpool Hospital and is now in a serious but stable condition. A woman in her 40s was taken to St George Hospital with multiple stab wounds and is in critical condition. Another woman was hospitalised in a serious condition with a stab wound to the abdomen. The police officer sustained a large laceration to his arm and is in a stable condition. Superintendent Faulds praised the brave bystanders who went to assist those in the crash, without knowing what was about to unfold. “Amazing work, they’ve just turned up thinking it was a normal motor vehicle accident so they’ve obviously have gone to render assistance to both people and then they were faced with a male armed with a box cutter, quite frightening but very brave on those peoples’ behalf,” he said. He has asked the community to reach out to Crime Stoppers or Sutherland Police if they have any information about the incident. Images: Nine News

Caring

Financial hardship is the biggest driver of loneliness. Here’s why – and how to tackle it

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/michelle-h-lim-176472">Michelle H Lim</a>, <a href="https://theconversation.com/institutions/university-of-sydney-841">University of Sydney</a> One in four Australians <a href="https://lonelinessawarenessweek.com.au/wp-content/uploads/2024/08/why-we-feel-lonely.pdf">report</a> feeling lonely, according to our new report released this week from our research collaboration. The data builds on a large <a href="https://endingloneliness.com.au/wp-content/uploads/2023/10/ELT_LNA_Report_Digital.pdf">study we conducted last year</a> on social connection. Together, the data show that once someone <a href="https://endingloneliness.com.au/wp-content/uploads/2023/10/ELT_LNA_Report_Digital.pdf">becomes lonely</a>, they’re likely to stay lonely. Feeling lonely can have a <a href="https://endingloneliness.com.au/wp-content/uploads/2023/10/ELT_LNA_Report_Digital.pdf">negative impact on your health</a>. It increases the chance of having <a href="https://pubmed.ncbi.nlm.nih.gov/27124713/">social anxiety and depression</a>, and impacts the <a href="http://dx.doi.org/10.1037/0022-3514.85.1.105">health of your heart</a>, your <a href="http://pss.sagepub.com/content/13/4/384.full.pdf">sleep</a> and levels of <a href="https://pubmed.ncbi.nlm.nih.gov/15041083/">inflammation</a>. It also increases the likelihood of an <a href="https://www.ncbi.nlm.nih.gov/pubmed/?term=Loneliness+and+Social+Isolation+as+Risk+Factors+for+Mortality%3A+A+Meta-Analytic+Review">earlier death</a>. Staying lonely can accelerate these <a href="https://pubmed.ncbi.nlm.nih.gov/31237442/">negative impacts</a>. As more Australians grapple with a cost-of-living crisis, a key driver of loneliness is financial hardship. <h2>Am I lonely?</h2> Loneliness is a negative feeling that arises when your <a href="https://www.gilc.global/_files/ugd/410bdf_62e236db3a7146cd9f2654877a87dbc6.pdf">social needs are not met</a> by the relationships you hold. So you can feel alone, even if you’re surrounded by others, if you’re not getting the right kind of company and support. This might mean you feel, to a certain extent, that: <ul> <li>you are not “in tune” with others</li> <li>your relationships are not meaningful</li> <li>you do not belong</li> <li>you do not have a group of friends</li> <li>no one understands you</li> <li>you do not have shared interests with others</li> <li>there is no one you can turn to.</li> </ul> Not all of these may relate to you and you may experience these in varying degrees. <h2>What drives loneliness?</h2> We <a href="https://endingloneliness.com.au/wp-content/uploads/2023/10/ELT_LNA_Report_Digital.pdf">found</a> particular communities were more at risk of persistent loneliness: <ul> <li>those aged 18 to 24</li> <li>people from culturally and linguistically diverse backgrounds</li> <li>people who were single or divorced</li> <li>those with a chronic disease</li> <li>those with mental ill health.</li> </ul> But the largest effect we found, even after we accounted for all other possible contributing factors, is the impact of financial hardship. People who face financial hardship were almost seven times more likely to report persistent loneliness, and almost five times more likely to report persistent social isolation, compared with people who did not face financial hardship. This aligns with other studies that link economic hardships to <a href="https://pubmed.ncbi.nlm.nih.gov/33241698/">poor health</a>. In <a href="https://pubmed.ncbi.nlm.nih.gov/37761396/">children from low-income backgrounds</a>, for example, their family’s economic hardship is one of the main factors that negatively impacts their physical and psychological health. In a large <a href="https://www.sciencedirect.com/science/article/pii/S0277953622004282?via%3Dihub">study</a> using the UK Biobank, people who are from a lower economic background had a higher probability of reporting loneliness. In <a href="https://pubmed.ncbi.nlm.nih.gov/37528108/">Australia</a>, when compared with people on incomes more than A$150,000, those with incomes under $80,000 were 49% more likely to experience loneliness in one year and 66% more likely to report loneliness in at least two consecutive years. <h2>Being poor affects how we interact with others</h2> Factors such as income and your living environment are some of the <a href="https://www.who.int/health-topics/social-determinants-of-health#tab=tab_1">social determinants of health</a>, which influence our health outcomes. However, to date, little has been done to examine exactly how the lack of financial resources negatively affects the way we interact with others. There are two plausible scenarios. First, having financial pressures may change the way we feel and relate to others due to higher stress levels. Second, financial pressures may stop us from socialising because we have to take on more work to earn more money or we try to cut costs to save money. Socialising can be free in some circumstances, but most of the time, there is a cost to getting to places, or doing an activity together. <h2>What can we do as a society?</h2> The <a href="https://news.gallup.com/opinion/gallup/512618/almost-quarter-world-feels-lonely.aspx">high prevalence of loneliness across the world</a> – and the growing scientific evidence of the negative impact on our health, wellbeing and productivity, and subsequently the economy – can no longer be ignored. The World Health Organization is repositioning loneliness as a global public health priority and has established a <a href="https://www.who.int/groups/commission-on-social-connection">Commission on Social Connection</a>. This commission aims to set the global agenda for social connection, work with high-level commissioners to make the case for global action, scale up proven solutions and measure progress. We need to start by building a <a href="https://lonelinessawarenessweek.com.au/wp-content/uploads/2024/08/How-can-we-create-a-culture-of-connection.pdf">culture of connection</a> in Australia. This means changing the way we make decisions on how we relate to each other, promoting social connection within our schools, workplaces and communities. And to modify policies to allow us to start and maintain healthy social connections. Health and social policies to address loneliness and social isolation have to consider the impact of low incomes and increased financial pressures as barriers to building and maintaining meaningful social connection. Related to this is urban planning. People require safe and no- or low-cost spaces to interact in and to start and maintain relationships. This includes parks, libraries, public squares, community gardens and neighbourhood houses. Cuts to building or maintaining these spaces will stop people from interacting, gathering, or socialising within their community. Not addressing loneliness effectively or quickly will lead us to persistent loneliness and to potentially more distress. <h2>How to connect if you’re financially pressured</h2> Don’t feel alone in this experience. Let your family or friends know that you are financially pressured. Chances are, they are experiencing the same pressures because of the rise in the cost of living. Select no- or low-cost activities such as walking in the park with a friend, or connecting on the phone. Look for free events offered in your local area and city. Consider having meals at home as opposed to going out, or low-cost food options. Find some digital spaces which can allow you to interact with others in shared interest topics. If someone shares they are feeling lonely, asking “is there anything I can do to help?” facilitates the conversation and lets others know you are there without judgement. <hr /> If this article has raised issues for you, or if you’re concerned about someone you know, you can call Lifeline on 13 11 14.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/236135/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/michelle-h-lim-176472">Michelle H Lim</a>, Associate Professor of Psychology, <a href="https://theconversation.com/institutions/university-of-sydney-841">University of Sydney</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/financial-hardship-is-the-biggest-driver-of-loneliness-heres-why-and-how-to-tackle-it-236135">original article</a>. </div>

Money & Banking

Olympic disaster as Nine publishing staff stage mass walkout

Nearly all journalists employed by Nine Entertainment newspapers – more than 90 percent – are going on strike just as the 2024 Olympic Games in Paris are about to commence. This includes 20 reporters already on the ground in Paris, significantly impacting coverage of the event. The strike, beginning Friday July 26 and lasting for at least five days, follows a vote by staff at Nine's key mastheads – The Age, the Sydney Morning Herald, Australian Financial Review, WAtoday, and Brisbane Times– who overwhelmingly supported the industrial action. The decision comes after failed negotiations over annual pay rates between union representatives and Nine Entertainment management. During a crucial meeting on Thursday, <a href="https://www.news.com.au/entertainment/tv/current-affairs/more-than-90-per-cent-of-nine-publishing-staff-walk-off-the-job-on-eve-of-2024-olympics/news-story/1bb81c607dbae8c7756e9726d085e45c" target="_blank" rel="noopener">news.com.au reported</a> that a 3.5 percent annual pay rise offer from Nine executives, up from the existing 2 percent, was rejected by journalists. The Media, Entertainment & Arts Alliance (MEAA), representing 90 percent of the journalists, deemed the proposal insufficient amid ongoing inflation and recent announcements of significant job cuts, including 90 positions from the publishing division. The strike, coinciding with the Olympic Games' opening, poses a substantial challenge for Nine, which holds exclusive broadcast rights to the event in a $305 million deal. The company has assured the public that plans are in place to maintain production and distribution during the walkout, with "skeleton staff" working in local newsrooms. In a statement, Nine's publishing managing director, Tory Maguire, expressed disappointment over the union's decision while still committing to continued negotiation: "While it is disappointing the union has elected to proceed with industrial action, we can confirm comprehensive plans are in place to ensure the production and distribution of Nine Publishing mastheads will not be impacted and our readers will continue to have access to unrivalled coverage of the Paris Olympics." The situation is further complicated by concerns among staff over job security and the potential use of artificial intelligence in journalism, exacerbating fears of further job losses. Should the strike threaten to extend beyond the initial five days, the financial implications for Nine are substantial. The network, having invested over $120 million in this year's Games, faces potential losses amid high production costs and declining advertising revenue. Image: Nine Entertainment

Legal

Been scammed? Here's how to financially recover

Many people feel shame and embarrassment after realising they have been scammed. But you shouldn’t. You did nothing wrong; you are the victim of a crime. Not only are such feelings bad for your mental wellbeing, but they also often stop people reporting the scam or taking action to avoid further losses. Remember too that you’re not alone: victims reported more than 601,000 scams to the ACCC in 2023, together losing a staggering $2.74 billion. People of all ages, professions, and backgrounds have been affected. As hard as it may be, try to leave emotion aside and approach this like any other money matter – logically and methodically. Doing so will help you act faster and more decisively, which is crucial to your financial recovery. The following checklist will help you through this process: <ul> <li>Step 1 – Try to recoup your stolen money</li> </ul> Report the scam immediately. Contact your bank or card provider to stop the transaction being processed. Notify the company or marketplace where it occurred – they may have options to reverse the payment or for you to claim compensation for fraud. Also inform the ACCC’s Scamwatch and police if relevant, which may aid in tracking down the scammer and will help them alert the wider public on what to look out for. Unfortunately, the money is likely gone for good, but prompt action may just help you get some or all of it back. <ul> <li>Step 2 – Secure your accounts from further thefts</li> </ul> Once scammers have found a way to steal money, they often go back to try for more. Don’t let them! Freeze or cancel affected debit and credit cards, accounts etc. Change and strengthen all your passwords. Set up two-factor authentication if you haven’t already. Remove any suspicious applications on electronic devices. Double check the registrations of any business, adviser or tradesperson before engaging their services. Regularly check your superannuation, investments etc. to monitor for any inconsistencies. <ul> <li>Step 3 – Safeguard your cash flow</li> </ul> Don’t multiplying your losses by racking up new debts to cover the stolen money. That means limiting the use of credit cards, payday lenders and Buy Now, Pay Later schemes. Consider paying with cash instead to help you stick to a budget. If you have lost everything, register with Centrelink for income support. You may also be able to apply for hardship provisions with your bank, phone and energy providers and other essential services. <ul> <li>Step 4 – Get reputable advice</li> </ul> Legal advice may be able to get you out of bogus contracts, like loans or phone plans, and help you in the event your personal information has been stolen (which can be used in various ways to steal money). If you can’t afford a lawyer, there are free alternatives such as Legal Aid or Community Legal Centres. Specialist services such as the Women’s Legal Service may offer support where partner coercion or domestic abuse is involved. Accounting and financial advice may also help you navigate assistance options and longer term recovery efforts. <ul> <li>Step 5 – Rebuild your finances</li> </ul> Your ability to rebuild your finances after a scam will depend on a range of factors, including how much was lost plus your age and circumstances. You could seek to increase your earnings and/or cut your spending by tweaking your household budget, delaying retirement, or temporarily taking a second job to boost your income. Another option is to make your remaining finances work harder than before, such as adjusting your investment strategies (e.g. changing your risk weightings or selling assets) including within your superannuation or accessing equity in your home. If you’re a self-funded retiree, you may now qualify for a part or full pension if your scam losses push your total assets below the means test threshold. Ultimately, the most important things when dealing with the fallout from a scam is to look after yourself and protect what you have left. Scammers have already taken off with your dollars. Don’t let them steal your sense too! Helen Baker is a licensed Australian financial adviser and author of On Your Own Two Feet: The Essential Guide to Financial Independence for all Women. Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at <a href="http://www.onyourowntwofeet.com.au/">www.onyourowntwofeet.com.au</a> Disclaimer: The information in this article is of a general nature only and does not constitute personal financial or product advice. Any opinions or views expressed are those of the authors and do not represent those of people, institutions or organisations the owner may be associated with in a professional or personal capacity unless explicitly stated. Helen Baker is an authorised representative of BPW Partners Pty Ltd AFSL 548754. Image credits: Shutterstock

Money & Banking

What are financial years – and why are they different from calendar years?

<div class="theconversation-article-body"> <a href="https://theconversation.com/profiles/michaela-rankin-1544784">Michaela Rankin</a>, <a href="https://theconversation.com/institutions/monash-university-1065">Monash University</a> Yesterday was July 1, the first day of the new financial year in Australia. Also called fiscal years, financial years are often abbreviated in print. The one that’s just begun in Australia – July 1 2024 to June 30 2025 – will typically be denoted by FY24/25 or FY25. As the name suggests, financial years are used for financial reporting, tax and budgeting purposes. Whether you are preparing an individual tax return or financial statements for a business, it is important to understand the difference between financial and calendar years. Both have 365 days. But the calendar year, based on the <a href="https://www.timeanddate.com/calendar/gregorian-calendar.html">Gregorian calendar</a>, runs from New Years’ Day on January 1 through to December 31. Australian financial years on the other hand run from July 1 of one year to June 30 the next. But this July to June financial year <a href="https://web.archive.org/web/20200430054150/https:/www.cia.gov/library/publications/the-world-factbook/fields/228.html">does not apply</a> in all countries. Many align their financial year with the calendar year, but others have further variations still. So why are they different, and what does that mean for businesses operating across borders? <h2>Different around the world</h2> In contrast to our own, the United Kingdom’s financial year starts on April 6 each year and runs to April 5 the next. The English and Irish New Year traditionally fell on March 25, when taxes and other accounts were due. But in the 18th century, the British empire switched from the Roman Julian calendar to the Gregorian calendar, and had to <a href="https://www.bowesbrooks.co.uk/why-does-the-tax-year-start-on-6th-april/">adjust the start date</a> to avoid losing tax revenue. India’s fiscal year runs from April 1 until March 31, for a <a href="https://www.idfcfirstbank.com/finfirst-blogs/finance/reasons-why-the-financial-year-starts-from-april">number of reasons</a>. Historically a country that was heavily focused on agriculture, this timeframe aligned with the crop cycle and allowed the government to develop financial plans for the sector. The British empire also influenced the April reporting schedule in India, as prior to independence many financial policies were based on the British system. <h2>Government budgets play a role</h2> In the United States, fiscal years once ran from July 1 to June 30, like Australia’s do now. But in 1974 this was <a href="https://www.federaltimes.com/management/budget/2022/09/20/why-the-us-federal-fiscal-year-2023-starts-in-october/">changed</a> to instead span October 1 to September 30, giving Congress more time to agree on a budget each year. In the US, however, companies can also <a href="https://www.business.com/articles/how-to-decide-on-fiscal-year/">choose their own</a> fiscal years. Some choose a calendar year, but others elect dates that better align with their business cycle. Walmart’s, for example, ends on January 31 each year to reflect its typically strong financial performance over the holiday period at the end of the year. In Australia, the financial year matches government reporting cycles. Unlike the northern hemisphere, our parliamentarians typically take holidays over summer in December and January, which makes meeting over November and December to approve government budgets difficult. The federal budget is issued in May for the following financial year, giving parliament time to consider it before the new fiscal year begins. <h2>Comparing (and taxing) performance</h2> Regardless of the time period over which a financial year operates, its primary purpose is to provide a standardised time frame for financial reporting. Financial years allow income and expenses to be tracked and compared over the same timeframe each year. This allows investors to compare business performance across consistent periods. They are also used to determine the collection of personal income tax. Our government uses this information to calculate the amount of tax it will collect through the Australian Taxation Office each year. Businesses with operations spanning multiple countries may have to contend with fiscal years that do not align. Where this is the case, they may need to choose one financial year for the whole company, typically that used by the parent company. Keeping track of the financial year is helpful for individuals, in knowing when tax returns need to be prepared (and when to expect end-of-financial-year sales). It is also important for businesses to consider the financial year in making budgeting, business and tax planning decisions. <img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/233655/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/michaela-rankin-1544784">Michaela Rankin</a>, Professor and Head, Department of Accounting, <a href="https://theconversation.com/institutions/monash-university-1065">Monash University</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/what-are-financial-years-and-why-are-they-different-from-calendar-years-233655">original article</a>. </div>

Money & Banking

Super funds are using ‘nudges’ to help you make financial decisions. How do they work?

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/fernanda-mata-1533222">Fernanda Mata</a>, <a href="https://theconversation.com/institutions/monash-university-1065">Monash University</a>; <a href="https://theconversation.com/profiles/breanna-wright-267597">Breanna Wright</a>, <a href="https://theconversation.com/institutions/monash-university-1065">Monash University</a>, and <a href="https://theconversation.com/profiles/liam-smith-5152">Liam Smith</a>, <a href="https://theconversation.com/institutions/monash-university-1065">Monash University</a> Late last year the federal government announced <a href="https://ministers.treasury.gov.au/ministers/stephen-jones-2022/media-releases/government-unveils-comprehensive-financial-advice">measures</a> to make it easier for Australians to access financial advice. As part of this, the government wants super funds to use “nudges” to get members to engage more with their retirement investments and superannuation, especially when they’re starting work and approaching retirement. While the legislation containing the changes is still in the consultation phase, super funds are <a href="https://www.afr.com/companies/financial-services/super-funds-spend-big-ahead-of-advice-reforms-20240418-p5fkx6">upskilling staff</a> and making other changes to improve customer service or risk a government crackdown. Telling funds to use <a href="https://www.behaviourworksaustralia.org/blog/nudging-what-is-it-and-how-can-we-use-it-forgood">nudge theory</a> to advise on super comes as more than five million Australians are heading towards retirement. <h2>What is nudge theory?</h2> Nudging is used to encourage people to pick the “better” option, without taking away their freedom to choose differently. For example, sending regular reminders to members about the benefits of voluntary contributions can get them to increase the amount they put in. This nudge makes it easier for them to contribute more – the better option – while still allowing them to choose not to. Assistant Treasurer Stephen Jones <a href="https://ministers.treasury.gov.au/ministers/stephen-jones-2022/media-releases/government-unveils-comprehensive-financial-advice">explained</a> the government’s changes were needed because so-called “fin-fluencers” were providing unregulated financial advice on social media platforms to Australians unable to pay an adviser. <h2>Helping people protect their interests</h2> There are three ways, supported by research, nudges can help Australians engage with their super. 1. Future self visualisation This involves getting young people to think about their <a href="https://www.halhershfield.com/considering-the-future-self">future selves</a> and visualise their life in retirement. This can help them to recognise the long-term benefits of getting actively involved with their super. Showing fund members how they might look when older by using an ageing filter software, for example, can make this visualisation more real for them and <a href="https://journals.sagepub.com/doi/full/10.1177/23794607231190607">enhance understanding of their future selves, leading to higher engagement</a>. 2. Simplification We all know financial products and superannuation can be complicated. The information and choices presented can lead to <a href="https://thedecisionlab.com/biases/choice-overload-bias">decision paralysis</a>, causing people to delay or opt out of making a decision. By simplifying the process, funds can motivate people to get more engaged with their super. To get people to make voluntary contributions, for example, it might be more effective for funds to recommend <a href="https://siepr.stanford.edu/news/how-simple-nudge-can-motivate-workers-save-retirement">a specific percentage of their salary</a> rather than offering several options. Deciding whether to boost contributions by an extra 3%, 4% or 5% can be overwhelming, especially for people with poor <a href="https://theconversation.com/are-you-financially-literate-here-are-7-signs-youre-on-the-right-track-202331">financial literacy</a>. 3. Language and framing The way options are framed and the language super funds use can significantly impact member engagement. Australians may be more likely to make higher voluntary contributions if they are asked how much they want <a href="https://www.bi.team/press-releases/the-small-nudges-that-could-make-young-people-142000-better-off-in-retirement/">to “invest” in their super </a> instead of how much they want to “contribute” or “add”. The word “invest” encourages people to think about future benefits, motivating them to make higher contributions. How options are labelled can also have an impact on <a href="https://www.bi.team/press-releases/the-small-nudges-that-could-make-young-people-142000-better-off-in-retirement/">member engagement</a> and decision making. For example, highlighting concrete benefits of different voluntary payments, such as “a 4% contribution keeps you above the poverty line”, and “a 10% contribution allows for a comfortable retirement according to Australian standards” can increase how much people are willing to contribute. <h2>Ethical use of nudges</h2> The <a href="https://www.superreview.com.au/news/superannuation/industry-body-backs-super-fund-nudges-though-parameters-need-be-set">Financial Services Council</a> backs the government on getting super funds to nudge members about contributions and investments but says there are limits. Parameters around nudging should be set […] to ensure that the language is appropriate and does not ultimately amount to defaulting. For example, letting a customer know that as they approach retirement, they need to make a decision about what retirement product they wish to utilise would be an acceptable nudge, while contacting a customer to let them know that they will be placed in a product when they retire, would not necessarily be acceptable. The council emphasises the importance of super funds recognising <a href="https://www.superreview.com.au/news/superannuation/industry-body-backs-super-fund-nudges-though-parameters-need-be-set">people’s autonomy</a> when delivering a “soft” or “hard” nudge. Soft nudges are gentle prompts and reminders designed to guide people to make good choices without pressuring them, such as sending an email reminder to review their investment options. Hard nudges are more direct in their guidance. These might include recommending specific investment options. Despite these differences, <a href="https://www.behaviourworksaustralia.org/blog/can-we-have-a-quiet-word-about-behavioural-science">ethical use of nudges</a> should encourage engagement while respecting people’s autonomy by making it easy for them to opt out. The use of nudges presents a valuable opportunity to increase superannuation fund members’ engagement. Whether through future self visualisation, simplification or language framing, ethical nudges can motivate members to take action, leading to greater confidence in navigating the retirement transition and achieving retirement goals.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/230404/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/fernanda-mata-1533222">Fernanda Mata</a>, Research Fellow, <a href="https://theconversation.com/institutions/monash-university-1065">Monash University</a>; <a href="https://theconversation.com/profiles/breanna-wright-267597">Breanna Wright</a>, Research fellow, BehaviourWorks Australia, Monash Sustainable Development Institute, <a href="https://theconversation.com/institutions/monash-university-1065">Monash University</a>, and <a href="https://theconversation.com/profiles/liam-smith-5152">Liam Smith</a>, Director, BehaviourWorks, Monash Sustainable Development Institute, <a href="https://theconversation.com/institutions/monash-university-1065">Monash University</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/super-funds-are-using-nudges-to-help-you-make-financial-decisions-how-do-they-work-230404">original article</a>. </div>

Money & Banking

Urgent investigation into potential cancer cluster after mass diagnosis

An urgent investigation has been launched into a potential cancer cluster after five women from the same workplace all developed cancer. Liverpool City Council confirmed five staff members working at its Moore Street office building, in Sydney’s southwest, were diagnosed with thyroid cancer within three to five years of each other. Four of the five workers are taking part in an urgent investigation by the NSW Department of Health, while sixth worker who has reported a thyroid condition has also opted out. The staff members were all working on the sixth floor of the office building, which has since been shut down upon the commencement of the investigation, with workers being relocated to other floors. Jenny Havilah, who works on level six of the building and was recently diagnosed with thyroid cancer, told <a href="https://www.9news.com.au/national/liverpool-council-cancer-cluster-investigation-three-staff-diagnosed-thyroid-cancer/75ef3ccd-1ca6-4b41-b3b5-8c614886f093#:~:text=Liverpool%20Council%20has%20made%20the,were%20%22well%20and%20working%22." target="_blank" rel="noopener" data-tgev="event119" data-tgev-container="bodylink" data-tgev-order="75ef3ccd-1ca6-4b41-b3b5-8c614886f093#:~:text=Liverpool%20Council%20has%20made%20the,were%20%22well%20and%20working%22." data-tgev-label="national" data-tgev-metric="ev">9News</a> she was concerned for her colleagues' health and safety. “It certainly sounds very sinister,” she told the outlet when asked about how three of her workmates who sat five metres apart were experiencing the same health issue. “I’m worried about my colleagues, not just on the sixth floor (but) that worked in that building.” “I had my thyroid and some lymph nodes removed and I’ll get the results in a week or so.” In a statement, Liverpool City Council said it was taking the matter “very seriously”, and have employed a third-party environmental health consultant while the NSW Department of Health undertakes a separate epidemiological investigation. “The decision to relocate staff is in response to the council’s high level of concern for the welfare of its staff,” the council said. “Our thoughts are with those affected and we wish them a prompt recovery.” Image credits: Nine News

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