As we step into 2025, we wish you a joyful, healthy, and prosperous new year. This new beginning brings fresh opportunities and renewed hope as we look forward to the year ahead.

As 2024 drew to a close, the year finished much as it had begun, with a strong focus on inflation, stagnant interest rates and Australia’s housing market.

Returning inflation to target is the Reserve Bank’s highest priority. While there has been substantial progress as inflation continues to fall, figures are yet to reach the 2-3% target set by the RBA. The latest data shows a slight rise to 2.3% with underlying inflation sitting at 3.2%, down from 3.5%.

In December, the Board left the cash rate at 4.35% which hasn’t moved in 14 months. All eyes will be on the RBA announcement in February as there has been speculation of a rate cut; however, the Board remains cautious and will not give any indication as to when they will make the first rate cut in 2025. House prices continued to soften, with national home prices recording the first decline in almost two years in December.

Key Financial Changes in 2025 -

Superannuation: Compulsory superannuation payments will rise to 12%, strengthening retirement savings for Australians. Additionally, super contributions will now include paid parental leave, adding approximately $4,000 extra for eligible individuals.

Medicare: Changes to Medicare will see an increase in the thresholds for full and extended safety net reimbursements. This may impact out-of-pocket medical expenses for many Australians.

Parental Leave: Paid parental leave will be extended to 22 weeks, providing new parents with enhanced financial and personal support during the crucial early months of their child’s life.

Interest Rates: Major banks predict potential interest rate cuts in 2025. This could bring relief to homeowners and borrowers by reducing mortgage and loan repayment costs

The year ahead is full of potential, offering both opportunities and challenges. By staying informed and proactive, you can set yourself up for financial success. Wishing you a prosperous and rewarding 2025, filled with growth, stability, and achievements in all areas of life.

Let’s make it a great year!