Dear ,

At last, the final “tax” themed Boutique Update (Bout-Up) for 2007/08 and our first ever Budget wrap-up.

A friend of mine refers to her partner's ex-girlfriend as the "Unremarkable Blonde", a very fitting title for the leader of our non-policy making government.
 
This lack of policy making, however, is good news for agribusiness investors and their financial advisers. It seems that agriculture has survived another financial year without fuss (touch wood); in fact, we have been marginally encouraged by the government's promise to spend $9,000,000 (the Forest Industries Development Fund) on value adding initiatives and to boost forestry exports.
 
The Unremarkable Blonde did not skip over all asset classes. As of 13 March  2008 (7.30pm to be precise), any interest on Capital Protected Borrowing in excess of the Reserve Bank of Australia’s (RBA) indicator variable rate for standard housing loans will be treated as the cost of capital protection, and therefore it will not be deductible. The previous benchmark (RBA’s indicator variable rate for personal unsecured loans) will continue to apply for a period of 5 years or the life of the product (whichever is shorter of course).
 
So what exactly does this mean for investors? (CLICK here for more)

Notwithstanding this good news for the agri sector, advisers are informing us it can be difficult to convince their clients that Agrifunds are not necessarily higher risk, and are in fact an excellent diversification tool in times of volatility. 

We have asked Mike Bugelly of BDO Kendalls to provide you with some hot tips on how to educate your clients on the benefits of agribusiness. Mike has been recommending forestry projects for over 20 years and has had strong success because of his academic approach to blending and portfolio construction. BDM Direct is working with BDO to provide advisers with strategies and blending tools rather than stand alone products. (CLICK here to read more) 

Anissa Cavallo - Managing Director

We Australians have a lot to thank the Chinese for. They provide us with cheap manufactured goods (soon to include cars), their national savings finance our current account deficit and their
push towards a fully industrialised economy is keeping our miners extraordinarily busy, thus also pulling the Australian sharemarket out of the doldrums.
There are a few niggling issues that keep relations between our two countries on their toes – namely Tibet and the recently acquired Chinese habit of making hostile takeover bids for some of our companies (eg Sinosteel’s tilt at Midwest). Overall, however, the trade relationship built up since 1978 has been very profitable for both nations. (CLICK here to read more)

ADVISER 2 ADVISER: "COPING WITH TAX STRESS"

Ron Kucharski of Vantage Advisory adopts a simple approach to dealing with the stress: "Plan early and break your objectives down to small daily tasks – which you should be able to delegate to some extent. Most importantly balance your work life with pleasure. This means taking a break from work and adopting a distraction, be this time with the family or a partner, puppy dog or a physical hobby, thus allowing you to focus on something else once work is finished for the day.” Ron focuses on his '65 Mustang.

 
Sometimes hobbies and planning just don’t cut the mustard. Leonie Ladgrove of Stantins says nothing short of a bottle of wine can settle her nerves at times like these, and if that fails she suggests purchasing a holiday home somewhere far, far away like Fiji. “It’s the long beaches, the Pina Coladas and my script of valium that makes it all seem ok”. In addition, Leonie relies on a very strong team of advisers, accountants and administration staff to support her through the tax planning phase. “You need to build a team of supporters who are as excited about the business as you are… this can be difficult and takes real leadership.”
 
Whilst all advisers agree that planning is key, Howard Ghedia of Patron Financial Advice says it’s important to focus on providing solutions. “Advisers need a systematic approach to tax planning. By developing well defined strategies early in the piece, 90% of your work is done for you. Don’t be too product focused, as it’s the context that makes the difference.” Howard, who runs every morning with a personal trainer, and plays tennis twice a week with friends, says that maintaining peak fitness through exercise, diet and FUN also makes a difference. “Don’t forget to have fun, a healthy social life and friends, all of which are so important in times of stress.”