The Loft - Level 2, 627 Chapel Street, South Yarra, VIC 3141


Pinnacle Road Monthly Newsletter Edition #3

Welcome to our third edition of the Pinnacle Road monthly newsletter.

We break down what’s been happening in the market over the past month and how it’s affecting each of our services.


Accounting & Advisory


September in Accounting has seen the released of new Victorian State Government Grants and well as the start of JobKeeper 2.0


State Government Grants

The Victorian Government recently announced the $3 billion Business Resilience Package to help businesses impacted by ongoing restrictions and prepare for COVID Normal business. The package includes various cash grant, tax relief and cashflow support including the following:


Business Support

  • Small and medium sized business ($822 million): The third round of the Business Support Fund provides grants of $20,000, $15,000 or $10,000, depending on size, to around 75,000 eligible businesses with a payroll of up to $10 million. Applications are now open. Please note that this program provides support to businesses in industry sectors that are Restricted, Heavily Restricted or Closed and for which restrictions are not easing between the First and Second Steps (list of eligible sectors attached). Businesses in the building and construction industry are not eligible for this grant. We will shortly be sending around a separate email with more information on this package if you are eligible.


  • Licensed Hospitality Business ($251 million): The Licensed Hospitality Venue Fund provides grants of up to $30,000 for licensed pubs, clubs, hotels, bars, restaurants and reception centres, based on their venue capacity and location, plus liquor license fees waived until 2021.


  • Sole Trader Support Fund ($100 million): The Sole Trader Support Fund provides grants of up to $3,000 to over 30,000 eligible sole traders in sectors such as retail, accommodation and food services, creative and media, hairdressing, gyms, events, education and training who operate from a commercial premises or location as a tenant and are non-employing. This Program is not yet open.


Business Adaptation

  • $20 million voucher program to assist sole traders and small businesses in building their digital capability through off-the-shelf digital programs such as Shopify or Square online and workshops designed to help adapt to online operations. This Program is not yet open.


  • $8.5 million to market and expand the ‘Click for Vic’ campaign to promote small Victorian producer and encourage more Victorians to support local businesses.


  • $87.5 million Outdoor Eating and Entertainment Package to support hospitality businesses prepare for COVID Normal reopening across Victoria. This Program is not yet open.


Information about other support programs from the Victorian Government’s Business Resilience Package.


JobKeeper 2.0


JobKeeper 2.0 is an extension of JobKeeper which will run for the period 28 September 2020 to 28 March 2021 and have a new two-tiered payment rates depending on how many hours each eligible employee works.


Entities will be required to demonstrate a decline of 30 per cent relative to its comparable quarter in 2019.


JobKeeper Extension 1 – This extension period will run from 28 September 2020 to 3 January 2021.


You will need to demonstrate that your actual GST turnover has fallen in the September 2020 quarter (July, August, September) relative to a comparable period (generally the corresponding quarter in 2019).


JobKeeper Extension 2 – This extension period will run from 4 January 2021 to 28 March 2021.


You will need to demonstrate that your actual GST turnover has fallen in the December 2020 quarter (October, November, December) relative to a comparable period (generally the corresponding quarter in 2019).



    JobKeeper Extension 1

28 September – 3 January 2021

    JobKeeper Extension 2

4 January 2021 – 28 March 2021

             Tier 1 rate

Eligible employees worked 80 hours or more in reference period


    $1,200 per fortnight


$1,000 per fortnight

             Tier 2 rate

Eligible employees who worked less than 80 hours in reference period


    $750 per fortnight


$650 per fortnight


Please note that the above amounts are before tax


Please note that alternative tests for determining turnover and payment rates may be available in some circumstances. As such, if your business does not been the above criteria, it still may meet an alternative test criteria.


Now is the time to speak to your trusted advisor to determine if your business is eligible for any of these grants.


Residential Finance


Fixed Rates 2.09% and variable rates as low as 2.59%


Its been a pretty eventful month in the home finance world. With forecasted rate cuts, house inspections back on, and potential changes to the lending process announced, it is clear the government are looking to stimulate the housing market.


For last few months we have seen the market slow down in Victoria due to COVID, but more importantly due to no open for inspections being allowed. This rule has been lifted as of today, so we expect the next couple of months to be a very busy period for property purchasing. We have many clients who have pre approvals, and are just waiting to purchase.


Treasurer Josh Frydenberg announced last week the government will be relaxing tough lending laws imposed on banks, putting the responsibility back on the borrower. This is good news for anyone looking to borrow money, as the banks will have much less ‘red tape’ to sort through when approving your loans. This should speed up the process and make it easier to borrow money in the future.


An interest rate has been forecast by Westpac and NAB predicting the RBA will cut rates in October or November by 15 basis points. This means that we could see bank rates go even lower than what they are now. Currently rates of 2.19% are available for owner occupied loans over a fixed period, and we may see this drop even lower. What this means to people who already have a loan is you should really be looking at your current rate to make sure it is competitive. We have seen far too many people over the last 6 months still on rates of 5% and higher and have saved them thousands of dollars a year in repayments.


If your rate doesn’t start with a 2, please call myself or Tom and have a chat about refinancing and saving you money.


Wealth Management

Economic and Market Commentary

During the first half of 2020 the pandemic and associated lockdowns led to the most severe contraction in global and domestic economic activity in decades.  We saw earnings per share growth fall 38% for ASX200 index, which was larger than the 20% fall during the weakest point of the GFC. Globally economic indicators have seen a Deep V recovery which suggests people are now ready to spend following the Covid contraction. 


We can see below the US leading the recovery due to their markets being largely denominated in tech stocks.  Tech and IT drove the markets gaining 15.3% in the last month where other sectors such as Utilities underperformed, down 5.9%.  Markets like Australia and China being more heavily weighted in manufacturing and materials will benefit from the bottoming of interest rates and the return to normalcy.


This reporting season we’ve observed companies reluctant to provide much guidance or much conviction in their outlook statements, delaying capital investments and maintenance. With health outcomes starting to look hopeful once more and restrictions beginning to ease, this pent up capital expenditure could underwrite our recovery. 


The RBA has predicted that, barring a global resurgence of infections, we have already hit the trough with the 7.0% contraction in GDP for the June Quarter.  This would mean domestic GDP recovery is now underway, this would be reinforced by a Victorian emergence from lockdowns. It is expected a more gradual U-shaped recovery moving into 2021, which would be accelerated by the approval of a vaccine. Sector results and outlooks are varied which we explore below;



This sector had strong results driven by resilient commodity prices.  Iron ore prices in particular benefitted from global building and infrastructure programs providing elevated returns that are likely to stick around for the near term.  We all witnessed the record breaking gold prices in July of this year, reaching US$1,944 an ounce with economists anticipating it could still challenge US$2,000 later this year.



This sector exceeded market expectations and is well position for continued future growth.  Australia’s healthcare sector index outperformed the S&P 500 with a return of 19.9% compared to 19.1% for the past 12 months. While the procedural and supply based companies suffered from the broad lock downs, most healthcare companies had share price growth on the days they reported and will benefit as the country prepares to live with the virus at an eased level of restrictions.



As we’ve discussed previously the staggering level of stimulus provided by the government has resulted in above expected consumption. The breakdown of household spending shows a decrease of 2.4% in service consumption, namely transport and recreation, being propped up by a 1.0% increase in consumption of goods.  This could indicate households are ready to spend when services become available again. Toward the end of this month we’ll be seeing the wind back of fiscal stimulus and mortgage deferrals, economists will be watching carefully for any signs of distress over this time.


Real Estate

Results across real estate sub-sectors were varied. Retail unsurprisingly was hit hard with the move to online trading leaving rent collection under 50% for discretionary malls. This sub-sector could see further downward pressure if retailers decide to cut the overheads of bricks-and-mortar stores for cheaper e-commerce alternatives.  Markets tend to support this prediction with demand in e-commerce stocks skyrocketing, the crown jewel of this sector Shopify has seen a 161.8% increase in share price since January this year. Office leases continued to be serviced as the corporate sector moved largely to working from home. Future growth in the subsector is uncertain with business forced into flexible working space which could push the accelerator on decentralisation and a structural shift toward working remotely.


While the outlook is optimistic, the recovery is still expected to be very gradual and any knocks to confidence are still likely to cause near term pull backs and pricing opportunities.  The other event the world is watching nervously is the US elections, the result of which will have ripple effects globally.  We expect that a Trump victory would benefit US markets, avoiding Biden’s proposed tax increases.  Conversely a Biden victory is expected to result in an easing of foreign trade and relationship tensions which would benefit ex-US markets. Historically we’ve seen that a split house with a Democratic (Biden) President and a Republican Senate sees the best market performance.


As the pandemic has already inflamed geopolitical and domestic political frictions, a worsening of tensions could derail the global recovery and so we watch this space with interest.


Equipment Finance


We are starting to see some activity come back to the market which is encouraging.


I am strongly encouraging clients to obtain pre approvals before they start hunting for equipment, similar to buying a house you need that formal pre-approval first in this market.




For the right asset and borrower we are seeing mid 3%


Vehicle finance is a major area of our equipment finance business


Can offer our clients a full one stop solution


We can assist with:


  • Sourcing a new or second hand vehicle
  • Help sell your vehicle
  • Finance your vehicle
  • Insurance for your vehicle


Commercial Finance


Could your business do with a cash flow injection?


If you look over your balance sheet and see debtors are around 100k then how would 80% of that in cash help your cash flow?


With a debtor finance facility you can utilise your debtors to secure a cash flow boost, typically debtor finance companies pay up to 80% of your debtor ledger.


Further information can be found on our website

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