New Year Update 1 February 2023

Welcome to 2023 and our January news edition.

We hope that you enjoyed the holiday period and are ready to kickstart the new year with some sound financial goals.

Tony's market update reviewed the last quarter of 2022. A refresh of the Australian and International equities reveals inflation and interest rate rise impacts. The Bonds and Cash markets showed a slight improvement in the Australian sector. In this year's outlook, we will be keeping a close eye on consumption and labour markets.

Did you know about the Entrepreneurs' programme? The Australian Government-funded programme employs a network of business experts to help Australian businesses to strengthen, grow and innovate, helping you get from where you are to where you want to be. Advice and grants are on offer to enable high-potential businesses to strengthen, grow, innovate and commercialise nationally and globally. We are also business advice specialists that can provide sound growth strategies for your established business.

Now is the perfect time to reassess your digital health and take the steps required to meet the needs of your digitally savvy customer. Small business is flunking their digital presence and failing to make the most of the advantages it can offer, according to Navii, an outcome of Australia’s Federal Government’s Small Business Digital Taskforce. It's time to get a Digital Health Check.

If you want to learn more about the Research & development (R&D) tax incentive and how to self-assess your eligibility, join representatives from the Australian Taxation Office and AusIndustry for an information session. A webinar has been scheduled for Tuesday, 21 February at 2.00 pm AEDT.

We are so happy to announce a new member of staff, Tiana Ford has joined our team. She is assisting our Administrative team and we extend a warm welcome to her.

The office refurbishment is almost complete. Our rebrand is underway and is expected to deliver a fresh and uplifting concept for our company, staff and outlook.

We are looking forward to a positive year ahead and to assisting you on your financial journey.

The WD Nicholls Team

Happy new year to you all and let's hope that 2023 is a more positive year than 2022. Following a refreshing break let's look back and see how the calendar year finished.

Australian equities The Australian equity market (S&P/ASX 200 TR) continued its recovery after a poor first-half of the year and although pulling back in the month of December, returned a strong (+9.4%) for the quarter to finish off 2022 just slightly in the red at (-1.1%). The month of November provided the yearly highlight (hitting 7-month highs) as shares rallied off the back of falling treasury yields. Sentiment improved during the quarter as the level and frequency of future interest rate rises became somewhat dovish as falling monthly CPI numbers were printed.

International equities The December quarter continued to be dominated by interest rate and inflation data and to what extent central banks globally, would go to reign in decade-high inflation numbers at the risk of the global recession.

After a good start to the quarter, off the back of the November rally markets were given a dose of reality in December, giving up significant ground following a hawkish December US central bank meeting and a surprise change to Japanese monetary policy.

The S&P 500 rose a healthy (+7.4%) for the quarter, whilst the tech-heavy Nasdaq lost (-0.8%). In AUD terms, both indices underperformed given the positive quarterly movement of the Australian dollar (+5.5%). In Australian dollar terms, the broader global equity market (MSCI World NR AUD), provided a solid gain of (4.1%) for the quarter, assisted by Eurozone equities (STOXX Europe 600 NR) which surged (+13.5%) off the back of economically sensitive sectors such as Energy and Financials.

Emerging Markets (MSCI EM Index), posted strong returns over the quarter helped by a relatively weaker USD and optimism of a shallow slowdown given China reopening.

Bonds and Cash Global bond markets steadied somewhat in October and November however the month of December reversed some of that as yields rose strongly (prices lower) following further rate rises and US Fed chair Jay Powell reaffirming the bank’s ongoing goal of crushing inflation.

The world’s most aggressive and synchronised monetary policy tightening in 40 years entered a new phase as central banks prepared to slow the pace of interest-rate increases. During the quarter, the Federal Reserve hiked rates by 125bps to 4.25%-4.50%, pushing borrowing costs to the highest level since 2007, the RBA lifted by three lots of 25bps bringing the official rate to 3.10%, whilst the European Central Bank lifted rates by 125bps bringing the rate 2.75%, a level not seen since 2008. Australian bonds (Bloomberg AusBond Composite 0+Yr) were slightly positive for the quarter at (+0.38%). Global bonds (BBgBarc Global Aggregate TR Hedged) returned slightly better (+0.6%) for the quarter

Outlook Below is a chart that shows how markets historically have performed after a negative year of performance and as you can see in the majority of cases the next 12 months is “usually” more positive.

Given the comments above, we expect economic data to continue to worsen in Q1 as central banks remain committed to bringing inflation under control. Corporate earnings season will be watched as closely as ever for any signs that earnings may need to be revised lower yet again. We think inflationary pressures will continue to abate but not at a fast enough pace to stop central banks from tightening policy again. We, like others, will be watching consumption and labour market data very closely for any signs of weakness given both remain unusually strong. This all makes for a likely continuation of heightened market volatility during a period where we should start getting answers, or a clearer picture, of what lies ahead.

The Entrepreneurs’ Programme can get you from where you are to where you want to be with advice and grants to enable high-potential businesses to strengthen, grow, innovate and commercialise nationally and globally.

The Australian Government-funded programme employs a network of business experts to help Australian businesses to strengthen, grow, innovate, and commercialise to boost jobs, profits, exports, and resilience. Business Australia is the approved Delivery Partner for Growth and Strengthening Business clients in NSW and ACT.

The program is client-centred. It tailors the services to meet your needs and levels of commitment.

Through the program, you also have the opportunity to access grant funding. This funding can help you to:

• commercialise novel intellectual property

• take advantage of growth opportunities

• connect to research collaboration opportunities.

WD Nicholls also has business advice specialists who can provide an in-depth analysis and sound growth strategies for your established business.

Learning events

Entrepreneurs' Programme learning events deliver targeted and tailored support to Australian businesses.

The events address:

• learning challenges and gaps

• help peer-to-peer networking

• enable you to engage in skills development and learning to support your business

The events deliver this support through:

• single and multi-day workshops

• masterclasses

• exemplar business site visits

• panel discussions and group mentoring

• high-level introductory learning

The events are both online and in person across the country in metro, regional and rural areas.

if you have any questions, please email the learning events team at eplearningevents@industry.gov.au.

To learn more click the link below.

Source and credit: Business.gov.au

Small business is flunking its digital presence and failing to make the most of the advantages it can offer, according to Navii, an outcome of Australia’s Federal Government’s Small Business Digital Taskforce.

The Navii Digital Health Check survey, which quizzed 602 SMEs between August and December last year, gave small business a failure mark of just 32 per cent for its website, SEO and social media practices.

Only slightly better, the average business scored just 43 per cent on website basics such as a clickable phone number or displaying key information such as opening hours and a business address.

Navii – the Empowering Business to Go Digital program – is a government-backed, independent community of small business owners, industry and digital experts striving to help SMEs use digital tools to operate more efficiently.

Its Digital Health Check found that small to medium-sized enterprises were drastically underperforming when it came to their digital presence.

For example, SMEs only scored 18 per cent for Facebook activity compared with best practice markers such as “posted a minimum of two posts per week”, and “received at least five recommendations in the past two months”.

Its Instagram performance was only marginally better at 25 per cent, with the assessment checking for signals of health including “listing your account as a business account”, “using Instagram Highlights”, and “using hashtags on every post”.

On an assessment of search engine operations, SMEs scored an average of just 22 per cent for Google My Business and local search and 30 per cent for search engine optimisation (SEO). The SEO assessment examined simple best practices such as having a content-rich website, being indexed in Google, and ensuring your homepage meta title and description comply with Google’s recommendations.

Now is the perfect time to reassess your digital health and take the steps required to meet the needs of your digitally savvy customer. To learn more about Navii click the link below.

Source and credit: Accountantsdaily.com.au

If you missed the ATO's information sessions last year, don't worry! They are running another session in February.

If you want to learn more about the Research & development (R&D) tax incentive and how to self-assess your eligibility, join representatives from the Australian Taxation Office and AusIndustry for an information session. They will:

• guide you through key eligibility criteria that you should review and assess before you apply

• walk you through the R&D tax incentive process; from registering your activities to claiming your R&D tax offset

• provide good record-keeping tips.

If you're new to the program, we highly recommend attending this session before submitting your application.

Places fill quickly. Register now for the session 2:00 pm (AEDT) Tuesday 21 February 2023 below.

Source and credit: ATO.gov.au

We are so happy to welcome Tiana Ford to our team.

Tiana is currently assisting with administrative tasks. She has worked in a number of customer-based positions and is always happy to help with anything you may need or directing you to the person who can best help.

If you wish to arrange a telephone appointment or zoom meeting with one of our team please contact our office either by telephone or email.

• 21 February 2023 January monthly BAS due

• 28 February 2023 December quarterly BAS due

• 28 February 2023 Annual GST return due

• 28 February 2023 Quarter 2 PAYG and GST instalments due