Summer 2026
As we begin 2026, we extend our warmest wishes for a year filled with health, happiness and success. We look forward to embracing fresh opportunities and new possibilities.
We start the year with the release of the latest inflation data. While figures were lower than expected, economists remain divided about a February rate hike.
There was a larger-than-expected fall in the consumer price index to 3.4 per cent, with the Reserve Bank’s preferred measure of trimmed mean inflation down to 3.2 per cent.
While consumers were cautious in the lead-up to Christmas, with the Westpac–Melbourne Institute Index slipping from 103.8 in November to 94.5 mid-December, early reports show sales over the Christmas period were up on previous years.
Unemployment remained at 4.3 per cent and equity markets closed the year solidly with the ASX 200 up by almost 10 per cent (including dividends), although still short of its October high.
Looking ahead, all eyes will be on the RBA’s February interest rate decision as well as the fallout from the US attack on Venezuela.
2025 Year in review: It was a soft landing for Australia
Many investors breathed a sigh of relief at having survived (and even thrived) the turbulent economic and political events of 2025.
Super funds posted strong double-digit returns for the 2024-2025 financial year. Australia recorded modest economic growth, while inflation cooled a little throughout the year – albeit with a slight uptick at year’s end – and house prices surged before hitting the brakes in December. Share markets reported respectable gains locally and some surging profits globally.
The big picture
Markets and economies around the world have danced to the tune of the Trump Administration’s second term in office and reacted to wars and unrest in the Middle East and Ukraine.
The US President’s often surprising policy twists and turns, particularly a punishing new tariff regime, saw markets falter and exporters of goods and services to the US plunged into uncertainty.
The Australian dollar reflected the choppy conditions, hitting lows just under 0.60 USD in April before recovering slightly by year-end at just under 0.67 USD, this was buoyed by our strong iron ore exports and the growing demand for lithium, copper and rare earths.i
The artificial intelligence revolution was another feature of the year, driving US share markets ever higher with some fearing the bubble is overdue to burst.
Economy
Inflation’s stubborn resistance to the Reserve Bank’s measures to bring it down could lead to further interest rate rises in 2026.
The Consumer Price Index in January recorded an annual rate of 3.4 per cent, down 0.4 per cent on the previous month. The RBA’s flexible inflation target aims to keep the cost of living increases between two and three per cent.
The cash rate began 2025 at 4.35 per cent but after three cuts during the year, it was down to 3.6 per cent in December. The RBA is due to meet in February to consider its next move.
In the US, the Federal Reserve also cut rates three times, putting the interest rate to a range of 3.5 – 3.75 per cent.
The Australian economy grew 2.1 per cent in the year to September in a massive improvement on the previous year’s growth of 0.8 per cent.
Property
After two uneven years, home values surged again in 2025 by 8.6 per cent, adding about $71,500 to the national median.ii
It’s the strongest calendar year performance since the remarkable 24.5 per cent increase in 2021.
However, values softened in December, recording the smallest monthly increase in five months.
Darwin delivered the best performance with an 18.9 per cent gain in values during the year while Melbourne took the wooden spoon with a 4.8 per cent increase.iii
Share markets
Global equity markets proved that they could thrive, even in a higher-interest rate environment, and the AI revolution moved from the hype phase of the previous year to serious players in 2025.
While ‘The Magnificent Seven’ tech stocks have long ruled the S&P 500, in 2025 just two outperformed the index with a gain of 64.8 per cent for Alphabet and 38.9 per cent for Nvidia.iv
It was a slower pace for Australian markets with the S&P/ASX 200 delivering a solid total return of 6.8 per cent. While the big banks faced some pressure on margins as interest rates peaked, the materials sector was supported by the global energy transition. Dividend yields remained attractive, continuing Australia’s tradition of providing reliable income for retirees and SMSFs.
Commodities
Precious metals drove commodity values in the past year with investors looking for security amid interest rate movements and geopolitical tensions.
Silver was up by an astonishing 182 per cent during the year, but a sell-off in December saw the price finish the year with a 147 per cent gain.v
Meanwhile, gold’s safe haven status during times of uncertainty saw it jump by 65 per cent during the year.
Looking ahead
It seems likely the issues that dominated the financial markets in 2025 may continue to shape performance and returns this year.
Global politics and war are likely to move commodity prices and equity markets while the contrariness of US foreign policy will both spook and buoy investors.
In Australia, all eyes will be on the RBA, with high levels of speculation as to where interest rates will be heading in 2026.
i Australian Dollar | Trading Economics
ii Home Value Index: Softer landing after strong 2025
iii Home Value Index: Softer landing after strong 2025
iv Which Magnificent 7 Stock Had the Best Year in 2025? | Investing.com
Small business super and tax tune-up
This year is shaping up as one of the biggest for tax and superannuation reform.
Several major changes begin on 1 July, so small businesses that aren’t prepared, face compliance headaches, cashflow pressure and ATO scrutiny.
Here’s what you need to know.
Super must be paid every pay day
The most significant change is the introduction of Payday Superannuation. Payday Super will help employers meet their super guarantee (SG) obligations and help protect the retirement funds of millions of Australians.
From 1 July, employers must pay super at the same time as wage and salary payments.i
That means Super Guarantee (SG) contributions must be in an employee’s account within seven business days of each pay day.ii
For new employees, or those paying to a new super fund, you have 20 business days for the first payment to reach the account.
The new rules also include changes to how you calculate and report contributions.
Super will be calculated at 12 per cent of qualified earnings (QE). These include ordinary time earnings; salary sacrifice contributions and certain payments to contractors who are treated as employees.
You must include the year-to-date (YTD) amounts of QE and super liability in each Single Touch Payroll report.
SuperStream messaging upgrades
From 1 July 2026 there are changes to the contributions messaging used in the SuperStream system, which is the electronic standardised format you must use to pay super contributions.
The messaging changes include clearer error messaging and are designed to reduce the likelihood that your employee contributions are rejected by a super fund.
What employers need to do
The ATO is urging small businesses not to leave preparations to the last minute. Payday Super will increase your administrative workload and payroll processes will need to change.
- Confirm employee super fund details are current and correct
- Check your default super fund’s registration details are up to date
- Consider paying super contributions more frequently now to identify any errors or problems with rejected contributions before the rules change
- Review your payroll software and internal systems to make sure they’re ready to support Payday Super and the SuperStream changes
- If you currently use the Small Business Superannuation Clearing House, be aware that it closes on 1 July 2026 and you’ll need to make new arrangements
- Read about the changes to SuperStream and the New Payments Platform
And, an important note for those who currently pay super quarterly; you should model the impact of the more frequent payments now to check how your cashflow will be affected after 1 July. For small businesses that have tight profit margins, you will need to plan carefully and potentially create a business forecast to manage your cash flow.
New lower tax rates
From 1 July 2026, the tax rate for individual income between $18,201 and $45,000 will fall from 16 per cent to 15 per cent, with a further reduction to 14 per cent from 1 July 2027.iii
Make sure your payroll system is ready for the change and that the correct amounts will be withheld from employees’ wage and salary payments from the first pay run.
Also, check that the new rates do not affect other payroll calculations such as salary packaging or super contributions.
Earnings tax on high balance super accounts
Some small businesses also need to be aware the Better Targeted Superannuation Concessions (BTSC) measures start from 1 July 2026.
Following recent amendments, the BTSC for high balance fund members now includes a second threshold on super accounts over $10 million, with a concessional 30 per cent tax rate applying on the proportion of earnings corresponding to total superannuation balances (TSBs) between $3 million and $10 million.
A new 40 per cent tax rate applies on earnings from the portion of the TSB over $10 million. The earnings tax only applies to ‘realised’ gains on assets, such as when interest is earned or a property is sold.
If you need help preparing for the upcoming tax and super changes, contact our office today.
i Payday superannuation | Australian Taxation Office
ii Spotlight on… Payday Super | Australian Taxation Office
iii Personal income tax – new tax cuts for every Australian taxpayer | Australian Taxation Office
Passing on a family business isn’t easy. Here’s why – and what factors predict success
Last year, the world watched with interest as the Murdoch family’s real-life Succession drama came to a close.
Media mogul Rupert Murdoch’s children – eyeing an empire estimated to be worth more than US$20 billion (A$30 billion) and control of the Fox Corporation and News Corporation – had disputed a change to their trust that would put control squarely in the hands of only one of his heirs, Lachlan.
A settlement was reached in September, giving Lachlan control and paying three of his siblings to exit.
But the very public and bitter battle was a classic example of the factors at play in succession planning for any family business. In addition to the business implications, it’s often fraught with emotion and power struggles.
For a country such as Australia, which is heavily reliant on family firms, these tensions matter far beyond the headlines. Understanding why succession is difficult – and how to get it right – is essential.
Powerhouse of the economy
Family-owned businesses are a crucial part of Australia’s economy. Small and medium-sized firms account for about 99% of all businesses, with about 70% being family-owned.
Surviving over time can be challenging. The “30-13-3” statistic (30% of firms transition to the second generation, 13% to the third, and 3% beyond that) is well known, despite some researchers now calling it into question.
Global evidence indicates only a minority of family firms successfully transition across multiple generations.
Emotional ties
A major part of what sets family businesses apart from other types of firms relates to what some family business scholars call “socioemotional wealth”.
This describes the emotional value families place on their business: legacy, identity, reputation, continuity and the comfort of keeping decision-making “in the family”.
These emotional bonds can be a source of strength. Research has shown family firms can be remarkably steady during moments of upheaval, including mergers and acquisitions and periods of financial distress because they prioritise long-term stability and trust.
But they also explain why successions can become so fraught. When leadership transitions threaten a family’s legacy, identity or long-standing traditions, emotions intensify.
Parents and earlier generations can feel they’re not just losing a role, they’re also losing a part of themselves. They may also make strategic decisions driven only by emotions, leading to conflicts, financial disruption and potential failure.
Openness to change
A recent study of mine adds another important layer, suggesting families adopt one of two mindsets.
One sees reality as relatively fixed, with families cautious of risks that might destabilise their legacy. The other views the business as flexible and adaptable.
These contrasting mindsets may help explain why some successions unfold smoothly – and others erupt into conflict. Families with the latter mindset tend to be more willing to let the next generation reshape the business.
The next generation
Australia is heading for a A$3.5 trillion generational wealth transfer, one of the biggest shifts of assets in its history. This will include many family businesses.
At the same time, digital transformation is reshaping every industry – from agriculture to construction to retail.
Younger successors tend to be digital natives. They often arrive fluent in data analytics, automation and artificial intelligence (AI). Many grew up in environments where constant change was the norm, meaning they naturally lean towards adaptability and flexibility.
Older leaders, particularly founders, often lean the other way. Deeply connected to the business they built, they are shaped by decades of experience and success.
The same socioemotional wealth that sustained the firm can make them reluctant to hand over control or adopt untested digital tools.
Soon-to-be-published research of mine with Nidthida Lin at Macquarie University Innovation, Strategy and Entrepreneurship (ISE) Research Centre has explored the way in Australian family firms, founder influence and long periods of stability often reinforce a mindset that favours tradition and caution. In contrast, family control and a strong desire for dynastic succession, together with the involvement of later generations, tend to encourage change and the adoption of AI technologies.
That tension, between preserving the legacy and the desire to reinvent it, is now one of the biggest challenges Australian family firms face in ensuring “the show goes on”.
Getting it right
Succession planning is not just a financial or legal process. Families need to acknowledge the emotions and feelings involved, including love, fear, grief, pride and ambition.
Avoiding these conversations only increases the risk of misunderstanding and resentment.
Other important steps for success include:
- creating a governance structure – a clear set of rules and roles that guide how the family and the business make decisions
- empowering the next generation to lead the digital transformation, and
- testing the succession plan before a crisis.
Preparing early
The good news is businesses can prepare for this change well in advance. A good example of succession planning comes from family-owned Australian office supplies company, COS. COS has an annual revenue of A$300 million and more than 600 employees, as well as warehouses in every state.
When founder Dominique Lyone died suddenly in 2024, his two daughters, Amie and Belinda, had already stepped into positions as co-chief executive officers, thanks to a smooth succession plan he had initiated many years earlier.
Getting succession right is not just about choosing the next leader. It is about understanding the emotional foundations of the family, recognising the mindsets driving decisions and creating a path that makes room for the future.
Incidental exercise – put more pep in your step in 2026
What if feeling fitter, clearer and more energised this year did not require gym memberships, 5 a.m. alarms or creating gaps in your packed schedule? What if the secret was simply sneaking movement into your day?
Incidental exercise slips into your routine so easily you hardly notice you are doing it, yet it delivers real benefits. Tiny bursts of movement sprinkled throughout the day can improve fitness, boost mood and support long term health and longevity. In other words, you can get healthier while still living your very busy life.
Move more to do more
Exercise is like a secret productivity tool, the more you move, the more it helps. It sharpens your thinking, steadies your mood and helps you sleep better. It even improves decision-making, which is especially handy when you are trying to make good choices.
How much is enough?
In good news for the time poor, a recent study led by the University of Sydney – which reviewed data from over 25,000 health and fitness tracking wearable devices – provided the best evidence yet that short bouts of incidental activity has powerful health benefits, reducing the risk of heart attack, stroke and even premature death – but, the length of activity and intensity matters.
The study found that moving continuously for one to three minutes at a time is the ideal, and can have comparable health benefits to longer bouts lasting 5 to 10 minutes, and if you are breathing hard (think huffing and puffing a bit) for some of that time, you have hit the sweet spot.i
Short and sweet
The easiest trick for busy people is weaving activity into moments you already have. Waiting for someone to join a meeting? Stretch a little. On a long call? Walk around. Take the stairs, park further away, or step off public transport a stop early. These tiny choices feel small, but they stack up like compound interest.
Quick strength moves also count. A few squats while the kettle boils or a handful of push ups against the wall between tasks can wake up muscles that have been quietly napping. Over a week these micro moves often add up to the equivalent of a full workout session without needing to block out any extra time.
Make it stick
This is where motivation usually falls apart. Most people start January with the enthusiasm of a new puppy then lose steam by week three. The trick is to make movement too easy to skip.
Start with a ridiculously achievable target. Aim for five mini movement sessions a day. They can be as short as one or two minutes. Some running or jumping on the spot, a brisk walk around the block, or a short strength burst all qualifies. It is amazing how satisfying it feels to tick off these tiny wins.
You can also gamify it. Keep a simple tally on your phone or scribble marks on a sticky note. Watching the numbers grow is oddly motivating. Some people use habit stacking by pairing movement with things they already do such as stretching while coffee brews or doing a mini workout before opening the inbox to transform everyday moments into anchors for healthy behaviour.
Others set micro rewards like a favourite tea or a quiet moment outside once all five sessions are done.
The aim is not perfection. It is repetition. Once these micro habits settle in, building on them becomes surprisingly easy as they create a steady drip feed of activity that quickly becomes habit. Once the habit settles in you can build up the intensity or duration naturally.
Build habits that last the whole year
Schedule movement exactly the way you schedule important tasks. Protect the time even if it is brief. Focus on consistency not perfection. Your future self will never wish you had moved less.
A healthier year starts with small steps
You do not need a dramatic transformation to feel stronger, clearer and more energised. A little extra movement sprinkled through each day supports your mind, your body and your ability to handle whatever the year brings.
Start small, stay steady and let your habits grow with you. You might be surprised at how quickly incidental exercise adds up.
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