Servicing Greater Sydney, Parramatta


Welcome to the
January 2016 edition of the Spry Roughley Report.

Coming back to work after the December/January break we can reflect on the insights that a holiday break offers. Of particular interest have been the excellent reflections on where our society is headed and how we embrace the plethora of new technology offerings.

Technology is both destroying jobs and creating opportunities, however, it is just possible that newer technologies with robotics, translation systems and algorithms may be destroying more higher level jobs than it is creating new ones.

Christopher Joye in the Financial Review this week has pulled together an interesting piece on why we should be scared of robots! The progress in computing power will apparently enable meaningful artificial intelligence systems to become reality between 2020 and 2050, leading to a real prospect of artificial systems that can surpass the capability of humans, in real time, to manage almost limitless knowledge (thankyou Google) and automatically reprogram themselves to continuously improve performance. This is indeed scary. The key, as always, is in how we manage change.

In business we all now understand the power of automation, robotics, e-commerce, digital information exchange and the range of emerging technologies that will transform most of our established business practices, on any scale we wish to contemplate. It appears our Government is also firmly of this view so hopefully we shall see real investment in core STEM (science, technology, engineering and math) teaching through our schools and places of higher learning so we can capitalise on the emerging opportunities. On cue, the Government released its Innovation and Science Agenda on 7th December – refer below - which includes some welcome start-up tax breaks to support the broader innovation agenda.

On a different tack, at this time of reflection it may be worth considering if your superannuation savings goals are on track. An interesting article is below.

And of course, it wouldn't be January without some crystal-ball gazing at what lies ahead in the financial markets, so here goes. The following is provided by Paragem, our authorising licensor for our financial planning, with the usual disclaimer "This document has been prepared by Paragem Pty Ltd [AFSL 297276] and is intended to be a general overview of the subject matter. The document is not intended to be comprehensive and should not be relied upon as such. We have not taken into account the individual objectives or circumstances of any person. Legal, financial and other professional advice should be sought prior to applying the information contained in this document. No responsibility is accepted by Paragem or its officers."

Financial markets finished 2015 on a pessimistic note with concerns about global recession and deflation stemming from the slowdown in China and weaker oil prices. These fears have continued in early 2016 with further sharp falls in equity markets around the world. How the rest of the year turns out hinges on the key question of global growth, especially in the US and China. Contributing to this will be what happens to the oil price and its effects on other commodity prices and the prospects for emerging nations.

Economic growth around the world and in Australia is expected to remain low but gradually improve by end-2016. Headline inflation will rise in 2016 but remain under control. Core inflation may be more subdued. Fears of a China hard landing seem overdone, but markets are obsessed with over-reacting to the monthly data, which often seem to be misreported and misinterpreted.

This, plus risks of further oil price declines, could disrupt markets for a while longer. Despite the Federal Reserve moving to start increasing interest rates, monetary policy around the world will remain very accommodative. Differences in monetary policy between the US and other major nations should see the US$ rise a bit more. This plus weakness of commodity prices should see the over- valued $A trade below US$0.70.

Several crystal ball gazing points to bear in mind for the coming year include:

  • US bond yields will most likely rise, but not dramatically;
  • The Australian bond market still seems to be pricing the chance of further rate cuts which makes this market look expensive relative to both fundamentals and the US market;
  • Australian Real Estate Investment Trust's look expensive relative to the rest of the equity market and the outlook for bonds;
  • Equity markets at current levels appear oversold relative to fundamentals and should be able to see some improvement once the current pressures dissipate;
  • As long as Australian business conditions remain supportive, domestic small cap stocks can continue to outperform large cap stocks;
  • The Australian dollar is still overvalued relative to commodities and the likely path of interest rates to 2016; A level of the A$ below US$0.70 looks more reasonable for 2016;
  • Further appreciation of the US$ as the oil price slips a bit further and US interest rates rise relative to the rest of the world should help European equities outperform US equities;
  • Emerging equity markets as a whole are unlikely to outperform developed markets until the price of oil bottoms out and/or the US dollar peaks;
  • Unhedged international equities will do better than hedged international equities and domestic equities;
  • Geo-political factors will continue to create bouts of volatility in the coming year with the Middle East being the biggest source of concern.
The take-out for me is to "stay the course". All the best for 2016.

As usual, please do not hesitate to call us on (02) 9891 6100 should you wish to discuss how any of the points raised in the report specifically affect you, or click here to send us an email.

Warm regards,


Martin Roughley, Director
Spry Roughley Services Pty Limited



Liability limited by a scheme approved under Professional Standards Legislation

Government's Innovation Agenda contains tax incentives

The Government is looking to support innovation and its recently released Innovation Agenda proposes a suite of new tax and business incentive measures. A key proposal is to provide concessional tax treatment to encourage early stage investors to support innovative startups. Under the proposal, investors will receive a 20% non-refundable tax offset based on the amount of their investment (capped at $200,000 per investor, per year), as well as a 10-year capital gains tax exemption for investments held for three years. The Government has advised that the scheme is expected to commence during 2016 as soon as supporting legislative amendments are passed into law.

The incentive is proposed to be available for investments in companies that: undertake an eligible business (scope to be determined); that were incorporated during the last three income years; aren't listed on any stock exchange; and have expenditure and income of less than $1 million and $200,000 in the previous income year, respectively.

Learn more about this...

Are your super saving goals on track?

The new calendar year is a good time to conduct a superannuation health check and set some new goals to help boost superannuation savings. Although there have been no seismic shifts in the superannuation landscape of late, it may be prudent to reacquaint yourself with the rules. The following are some considerations.

  • Make extra contributions – the general concessional contributions cap is $30,000 for 2015–2016. For people aged 50 and over, there is a higher concessional contributions cap of $35,000 for 2015–2016.
  • Check super savings – it is a good habit to check your super balance regularly. You may also want to protect your super from identity crime. For example, you may want to change passwords for accounts that can be viewed online.
  • Look for small lost super accounts – the threshold below which small lost super accounts will be required to be transferred to the ATO has increased to $4,000 (from December 2015).
  • Consolidate multiple super fund accounts – you may want to consider consolidating multiple super fund accounts. This may help avoid paying multiple fees, reduce paper work, and make it easier to keep track of your super.
  • Salary sacrifice super – you may want to ask your employer about salary sacrificing super, or you may want to consider reviewing existing arrangements with your employer.

Professional advice should be obtained before implementing a new retirement saving strategy. Please contact our office to discuss your circumstances.

Learn more about this...

Other services

Business Advisory

Contact details

Spry Roughley Chartered Accountants

(+612) 9891 6100

(+612) 9635 4782

Email us


  • Our firm is built on being attentive to and extensively knowledgeable about our clients so we can work with them to help them to both achieve their goals and protect them from risk. We are forward looking in our advice and always aim to be practical and right.
    - Martin Roughley, Founder Associate
  • In business, there is so much going on and you don’t always have all the answers. That’s when you need to know who to call. Our clients call us.
    - Shaun Madders, Director
  • Going beyond the compliance and routine is what we do. By maintaining open and frank communication we are able to provide valuable insights and assist in driving the changes required to help our clients achieve their goals.
    - Fergus Roughley, Director