The Weekly Wrap: What’s Happening in Your Hip Pocket 💰

Wrapped by Matt Bowen, Friday 23 May .

Another week, another handful of stories that’ll either save you money, make you think twice about your spending, or just help you understand what is going on with the economy. Let’s dive in…

🌊 Flood Support: What Help is Available Right Now

As this is published, floods are ravaging the Mid-North Coast and Hunter regions. A quick note to say that banks and insurance companies have specialist teams ready to help, and there are some genuine support options available – for individuals, farmers or small business owners.

The practical support includes things like reducing or pausing loan repayments to free up cash flow, temporary overdrafts or credit limit increases, changing loan terms to reduce interest or extend duration, and additional finance to help cover immediate cash flow shortages.

What’s crucial here is that all major Australian banks have these support mechanisms in place. You don’t have to struggle through financial difficulty on your own while you’re dealing with property damage and displacement.

One important warning though: unfortunately, natural disasters often bring out scammers. Be wary of any unprompted messages or emails claiming to be from banks or government agencies. If you receive any communication about financial assistance, call your service providers directly using official contact numbers to verify it’s legitimate.

The last thing anyone needs when dealing with flood damage is to also become a victim of financial fraud.

🎯 Tax Time Reality Check: What the ATO is Actually Looking For

Right, so we’re just 6 weeks out from tax time, and the Australian Taxation Office has basically given us a heads up about where they’ll be poking around this year. Think of it as your friendly warning to get your ducks in a row.

Here’s what’s got their attention:

Work-from-home expenses are still the big kahuna. With roughly 10 million Aussies claiming WFH deductions in 2024, the ATO has bumped up the fixed rate to 70 cents per dollar (up from 67 cents). That’s about a $60 difference if you can claim the full-time rate. Not massive, but every bit helps.

The golden rule? If you’re claiming your phone, internet, or that fancy ergonomic chair, make sure it passes the “pub test” – would a reasonable person think it’s actually for work? Because the ATO certainly will be asking.

Investment properties are another hot spot, particularly around interest claims. And Side Hustlers be on notice (yep, that’s the Uber and Airbnb hosts) are under the microscope if you haven’t been declaring income properly.

And here’s a fun fact: the ATO reckons there are 500k-1 million Aussies invested in crypto. If you’ve made profits trading Bitcoin or any other digital currency, they want to know about it on your tax return.

The takeaway? Start gathering those receipts now, and if you’re even slightly unsure about a claim, have a chat with a tax professional.

🛒 AI Shopping: Your New Personal Assistant or Privacy Nightmare?

This one’s pretty wild. Visa and Mastercard are working with tech giants like Microsoft, IBM, and OpenAI to basically turn AI into your personal shopping assistant. But we’re not talking about simple recommendations here.

Picture this: you tell an AI you want to book a holiday somewhere warm, with activities that suit your budget and luxury preferences. The AI doesn’t just find options – it can actually queue up purchases, add them to your cart, and with your permission, complete the transaction. Some systems are even being designed to handle purchases up to a certain threshold automatically.

The convenience factor is undeniable – imagine having AI hunt down the best deals while you’re doing literally anything else.

The reality is this tech isn’t quite ready for Australia yet, but Visa expects we might see some version of this by Christmas shopping season. Whether that excites or concerns you probably depends on how much you trust algorithms with your money and your data.

📈 RBA Cuts Rates: Finally Some Good News for Your Mortgage

The Reserve Bank cut the cash rate by 0.25% to 3.85%. If you’ve got a mortgage, you’re probably doing a little dance right about now.

The cut was exactly what the market expected, but what was more encouraging was the overall tone from the RBA. They’re feeling pretty confident that inflation is settling into that sweet spot of 2-3%, and the domestic economy is looking more rosy with strong jobs growth and wages rising above inflation.

Here’s what’s particularly good news: this should flow through to improved consumer confidence over time. When people feel more confident about their financial situation, they tend to spend more, which helps the whole economy.

The RBA is still keeping an eye on global economic uncertainty – particularly around potential trade wars and their impact on Australian consumers and businesses. But for now, household spending is on the rise, even if it hasn’t picked up as quickly as they initially expected.

They’re meeting again on July 8th, so we’ll see if this is the start of a trend or a one-off adjustment. Either way, if you’ve got a variable rate mortgage, you should be seeing some relief in your repayments soon.

⚡ Home Energy Savings: Aussies Ready to Spend Big on Going Green

Here’s something that might surprise you: according to new research from PropTrack and Origin Energy, Australian households are prepared to spend an average of $7,950 each (that’s $80 billion nationally) to make their homes more energy efficient.

And it’s not just about being environmentally conscious – though that’s part of it. The real motivator is those persistently high energy bills that have been hitting everyone’s hip pocket.

The timing is interesting too. Electricity prices jumped 16% according to the latest inflation figures, and with federal government subsidies rolling off at the end of the year, bills could continue rising.

Here’s what’s happening in the solar space: roughly 30-40% of Australian homes now have solar panels, contributing more than 11% of the nation’s electricity. But only 2.5% have home batteries to store that energy. That’s where the big opportunity lies.

If you’re thinking about making the switch, the federal government’s Cheaper Home Batteries Program offers rebates of around 30% off battery installation costs. The program officially kicks in on July 1st, but you can actually wire one up in advance and still receive the rebate – just don’t switch it on early.

According to the Climate Council, going fully electric can save households an average of $1,000 per year in energy bills. For many people, that’s reason enough to make the investment.

The Bottom Line

Whether it’s getting your tax affairs sorted, thinking about how AI might change the way we shop, benefiting from lower interest rates, investing in home energy efficiency, or accessing support during tough times – the key theme this week seems to be about being prepared and informed.

The financial landscape is constantly shifting, but the fundamentals remain the same: know your options, plan ahead where you can, and don’t be afraid to ask for help when you need it.

Got thoughts on any of these stories? Hit us up on the socials.

@ING_aust

@mattyb_money

Matt Bowen is ING’s Head of Consumer & Market Insights. He appears daily on Ch7 Sunrise program with commentary on the top money stories for Australians. For interviews or media enquiries, or interview requests, please contact Cassandra Geselle