Poole Group Wealth Newsletter – March 2026

Market movements and review video – March 2026

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

Escalating conflict in the middle east marked the end of February.

The month delivered mixed signals for the Australian economy.

The unemployment rate held steady, wage growth continued to edge higher, while household spending softened.

Inflation continues to be an issue. While the CPI remained steady, trimmed inflation increased slightly and the February 0.25% cash rate hike added pressure to mortgage holders.

Reporting season added its usual volatility to the share market and the ASX hit several record highs towards the end of the month, supported by solid corporate results, even as global markets remained cautious.

Click the video below to view our update.

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

How cutting the capital gains tax discount could help rebalance the housing market

Capital gains tax is once again the subject of parliamentary debate, with Treasurer Jim Chalmers declining to rule out options for reform.

Along with negative gearing, the capital gains tax discount has long been suggested as one cause of Australia’s housing affordability crisis.

The tax applies to the capital gain when an asset is held for more than a year, and it currently includes a “discount” of 50% on the total gain as a nominal offset for inflation.

These policies make speculative investment in housing more attractive, driving up prices and making it harder for first home buyers.

The true cost to the federal budget

Australia only introduced a capital gains tax in 1985, applying it to all gains made from investments. Importantly, the family home was not included, but investment properties were. Originally, the tax applied to the gain in value above inflation, known as the consumer price index (CPI) method.

In 1999 the Howard government, informed by the Ralph Inquiry, changed the way capital gains tax was calculated. A flat “discount” of 50% was applied to capital gains, rather than adjusting the price by inflation. This figure was an estimate given the limitations with the available data.

Each year, Treasury calculates the costs of tax policies. This data reveals that in 2024–25 the 50% discount cost the budget an estimated $19.7 billion. This is partly driven by increases in housing prices which have far outpaced inflation, as shown below.

House prices and CPI change by index

Chart: The ConversationSource: Multiple ABS sources

It is notable that between 1986 and 1999 housing prices were growing slightly faster than inflation, but since 1999 (the year the 50% discount was introduced) they have accelerated.

The benefits flow to the wealthy and people over 60

The benefits from the capital gains tax discount overwhelmingly benefit the wealthy and older people.

The Treasury’s Tax Expenditure and Insight Statements show that in 2022–23 89% of the benefit went to the top 20% of income earners, with 86% flowing to those in the top 10%. On average, the highest income earners received a benefit of more than $86,000, while those in the bottom 60% received around $5,000.

Recipients of the capital gains tax discount by taxable income decile, 2022–23

Around 83% of the benefit went to those earning the largest incomes.

Chart: The Conversation Source: 2025–26 Tax Expenditures and Insights Statement, Chart 2.7

Similarly, older people benefit far more than younger people. People over 60 received 52% of the benefit, while those between 18 and 34 received 4%. That is despite both groups comprising around 29% of the adult population.

Share of benefit and recipients by age, 2022–23

The largest share of the benefit, 20%, went to those aged 60 to 64, driven by a small number of individuals who received a particularly large share of the benefit.

Chart: The Conversation Source: 2025–26 Tax Expenditures and Insights Statement, Chart 2.8

Some options for reform

Current attention is centred on the prospect of the government reducing the capital gains tax concession for landlord investors in residential property. This reduction would have the combined effect of reducing the attractiveness of owning an investment property.

A further option is to retain this “gift” to landlords and investors, but to make it work much harder to improve housing outcomes, especially for households who are caught in the lower-quality end of the private rental market.

We have previously proposed to make negative gearing and capital gains tax concessions available only to investors who adhere to higher national dwelling and tenancy quality standards or who participate in social housing investment schemes. Landlords who did not want to operate according to these requirements would not receive either negative gearing or capital gains tax concessions.

How the housing system rewards wealth, not work

But a bigger problem lies beyond the investor segment of the residential housing market.

The total overall value of Australia’s residential stock is around $12 trillion. Of this, about $4.5 trillion is growth since 2020, spurred in part by very low interest rates over 2020–22. Around 65% of residential dwellings are owned by owner-occupiers, who are exempt from paying capital gains tax on their primary residence.

Growth in dwelling prices is due to many factors. Income growth and availability of credit are among the most important.

Since the deregulation of Australia’s financial sector in the 1990s, greater access to housing finance and relatively low interest rates have allowed households to leverage their incomes into tax-free capital gains in housing.

Wealthier households can gear their incomes and existing assets into even more valuable housing assets that they can also live in. This comes at the expense of households with lower incomes and assets, or those who are renters.

There is no sound economic reason why owner-occupied housing should be exempt from capital gains tax.

A more rational taxation system that supports home ownership but discourages asset speculation could provide greater financial support to first home buyers but also demand a greater tax share of the capital gains that their asset enjoys.

The tax rate could be set to allow capital growth in line with inflation, wages or the economy (gross domestic product), but then apply to the gains beyond that.

Such an arrangement could also tax higher-value properties at a higher rate than cheaper properties – thus tilting the burden of taxation towards the wealthy whose properties see the greatest capital growth.

Is housing a human right or an asset?

Ultimately, there is a more fundamental question to be answered about role of housing in society.

While housing has always had a speculative dimension in addition to providing shelter and comfort, the past 30 years since financial deregulation has seen the balance shift in favour of the former.

The question facing the current government is to what extent it is prepared to reduce speculation in housing in favour of the social purpose of housing? Does it have the appetite for a structural reset that prioritises housing as a home, rather than as a debt-geared speculative asset?

Is this a government of nervous tweaks and twiddles, or might the dire times in housing embolden landmark transformation? Can the values that Labor espouses be translated into progressive policy?

Source: https://theconversation.com/how-cutting-the-capital-gains-tax-discount-could-help-rebalance-the-housing-market-275213

What the RBA wants Australians to do next to fight inflation – or risk more rate hikes

When the Reserve Bank of Australia (RBA) board voted unanimously to lift the cash rate to 3.85% in February, the decision was driven by one overriding concern. It wants to stop the rising cost of living from becoming entrenched.

For some, like self-funded retirees, the rate rise was good news. Higher interest means their savings and term deposits will earn more. But for many others, including first home buyers who might have stretched themselves just to get a foot into the housing market, it was a very bad day.

RBA Governor Michele Bullock acknowledged that, saying:

I know this is not the news that Australians with mortgages want to hear, but it is the right thing for the economy.

She warned the alternative – letting inflation keep rising – would be even harder for more Australians.

So what’s the psychology behind the RBA raising rates now and leaving the door open to further hikes if needed? And what does the central bank hope Australians will do in response?

The price squeeze you’re feeling

There’s a striking gap between how the RBA describes the economy and how most Australians experience it.

On paper, things look healthy: unemployment is low, wages are growing.

But as Bullock acknowledged, the daily reality has felt very different.

The price level has gone up 20% to 25% over the last few years, and people see that every time they walk into a supermarket, or they go to the doctor, or whatever – that’s I think what’s hurting people.

That relentless price squeeze is not something you forget, even when the rate of increase starts to slow.

What’s driving inflation up?

The headline consumer price index (CPI) hit 3.8% in the year to December, well above the RBA’s target band of 2–3%. The “trimmed mean” – the underlying measure the RBA watches most closely – rose to 3.3%. Both are too high and moving in the wrong direction.

Bullock singled out three factors contributing to inflation. Each behaves differently and requires a different response.

Housing was the single largest contributor to inflation in December, up 5.5% over the year. That includes rents, which rose 3.9% (or 4.2% stripping out government rent assistance), as well as insurance, utilities, and new construction costs, which rose 3% as builders passed through higher labour and material costs.

There is an irony here. Rising interest rates are intended to cool demand, but they slow housing construction. Limited supply of housing is what’s pushing rents up in the first place.

“Durable goods” are the things we buy to last, such as cars, refrigerators, washing machines, televisions and furniture. Demand for many of those has been higher in the past year.

“Market services” are items such as restaurant meals, taxis, haircuts, gym memberships, medical appointments and holiday travel.

The RBA watches these carefully, because these are services priced by supply and demand in the domestic market. Those prices tend to be “sticky”: once they start rising, they don’t come back down easily.

Wages are also a big part of market services inflation. If the people providing those services are earning more, the cost goes up.

How rate cuts made shoppers relax

This is where the behavioural psychology gets interesting.

The RBA cut interest rates three times in 2025. Each cut sent a signal, whether intentionally or not: it’s OK to spend a bit more.

And spend we did. CommBank data shows Australians spent A$23.8 billion over the two-week Black Friday period, up 4.6% on the year before.

It’s a cautionary tale about “rational expectations”. Each rate cut potentially fuelled the belief that more would follow.

If people feel like they can afford to spend, then they spend. Businesses, sensing demand, may raise their prices to match. That’s exactly the self-fulfilling dynamic central banks worry about.

The 3 ways the RBA hopes we’ll react

When prices go up, as they have been, workers ask for bigger wage rises to keep up. To pay higher wages, businesses lift prices to protect their profit margins. Together, that can create a “wage-price spiral” that becomes very hard to break.

The RBA will be hoping Australians respond to this rate rise in three ways:

• spending less

• saving more

• not asking for big wage rises (although they’d never phrase it that way).

RBA Governor Michele Bullock described raising interest rates as “a very blunt instrument” to bring inflation down, and noted setting rates is “not a science. It’s a bit of an art, really. We’ve just got to respond as best we can.”

The RBA can’t undo the price rises that have already happened. It can only try to slow down further increases.

Source: https://theconversation.com/what-the-rba-wants-australians-to-do-next-to-fight-inflation-or-risk-more-rate-hikes-274984

The EOFY jobs that might matter more than you think

As the end of the financial year (EOFY) approaches, investors often focus on topping up super, maximising deductions, prepaying interest or reviewing portfolios. While these are all valuable activities, there are some less obvious tasks that can have a big impact on your tax position, wealth preservation and long-term planning outcomes.

Here are five areas that investors can often miss in EOFY planning.

 1. Capital gains in volatile markets

Investment markets have been volatile in recent years, with rapid movements in equities, property and fixed income. When investors buy and sell during choppy market periods, capital gains tax (CGT) considerations become even more important.ⁱ

It is the ideal time to assess whether:

You should realise gains this year or defer them – The decision can hinge on:

• Expected income this year vs next year

• Whether you qualify for the 50 per cent CGT discount

• Available capital losses

• Investment timeframes and risk appetite

You have unused capital losses – Losses can be used to offset realised gains, but they cannot be used against ordinary income. Some investors may find that realising strategic gains before 30 June allows them to “unlock” unused losses that have been sitting dormant.

Be aware of “wash sale” rules. Some investors plan to sell an asset to realise a loss and then quickly buy it back. The ATO calls this a wash sale and may deny the loss.ii

2. Superannuation recontribution strategies

A super recontribution strategy is sometimes overlooked because it requires coordination between pension payments, contributions and tax components. But, when used appropriately, it may significantly reduce future tax for beneficiaries and increase flexibility in estate planning.ⁱⁱⁱ

This strategy usually involves withdrawing a portion of your super (usually from the tax free and taxable components proportionally), then recontributing these funds back into super as a non-concessional contribution (if you’re eligible).

The result is that more of your balance becomes tax free, which can reduce or eliminate the “death benefits tax” that applies when super passes to non-dependent beneficiaries, such as adult‑children.^iv

3. Bringing forward deductions and deferring income

While prepaying expenses and deferring income is a well-known EOFY strategy, it may not be successful for everyone, so check carefully that it’s useful for you.

Bringing forward deductions – You may be able to prepay, interest on investment loans, income protection premiums, ongoing advisory fees, and professional subscriptions. But if you’re approaching income thresholds (such as Medicare Levy Surcharge minimums, private health insurance rebates or HECS/HELP repayment bands) it’s important to calculate whether prepayments will actually deliver you a benefit.

Deferring income – Small businesses using cash accounting may be able to defer invoicing until July and investors might choose to delay receiving distributions or bonuses. But don’t forget that deferring income may affect borrowing capacity or government payments.

4. Managing Division 7A loans

Division 7A can catch business owners off guard at EOFY. These rules apply when a private company lends money, pays expenses or provides assets to shareholders or their associates. If not handled correctly, the ATO may treat the payment as an unfranked dividend, resulting in significant unexpected tax.^v

To stay on top of your Division 7A obligations:

• Confirm all loans are documented

• Check minimum yearly repayments

• Consider whether to repay, refinance or restructure

• Don’t forget about company-paid personal expenses

A well-timed review can prevent unintended tax consequences and keep your structure compliant. 

5. Reviewing your records

Another often missed EOFY task is checking that your records and substantiation are complete before preparing your tax return.

The ATO is increasing its use of data matching programs, so having accurate documentation is essential. This includes keeping receipts for deductible expenses and retaining statements for managed funds and other investments.

EOFY planning is about much more than topping up super or gathering receipts. Hidden traps like CGT and Division 7A timing can create unnecessary tax if ignored, while proactive strategies such as recontributions can deliver long-term estate planning benefits.

By taking a structured approach, you can ensure every part of your financial picture is working together, and no opportunity is missed. We’re here to help. Please give us a call.

i Capital gains tax | ATO

ii Wash sales: The ATO is cleaning up dirty laundry | ATO

iii Super recontribution strategy: How it works | SuperGuide

iv Paying superannuation death benefits | ATO

v Loans by private companies | ATO