Money, Australian-style

1 Tax

Tax calculation in Australia is simple and automated. Except, not completely automated, especially for capital assets. e.g. I invested a lot in equities this year. Fooled by the fact that some of my shares automatically entered themselves into my tax return, I thought they all would. No. And some of the ones that did tidy up after themselves did so in a way that was not helpful, e.g. instead of identifying which equity by name, a mysterious 8-digit number appears in the tax record, which doesn’t seem to correspond to anything in my equity ownership records. So, I end up forensically accounting myself. This needs to be tidier.

Options for tax return preparation include:

• Neat Google Sheet from someone on Reddit

• Sharesight promises automating this tedious task as a feature.

  UPDATE: so far it has saved me many hours of life. I am impressed, even at the astonishingly poor exchange rate where the subscription is AUD25/month, i.e. about 200% of the US price. It integrates well with Interactive Brokers Here is a referral link. Tell ’em I sent you and get 10% off plus send me a USD10 kickback.

• Presumably other things? I have not yet tried them.

2 Real estate

Australia is deeply invested in policies to perpetually pump real estate speculation, which is a depressing drag on the profound potential of this country, in my opinion, and a tax upon wonder. We could build anything here, make anything, but instead we sell houses to each other, and vie for a slice of the passive income that we shave off the active economy, playing the intergenerational zero-sum game.

So long as I live here, a speculative real-estate economy will shape everything around me, so I must engage with it and, I suppose, find my own bit of peace at the expense of the wider economy. Currently, I am trying to minimise my exposure to the entire bubble via cohousing, which is a relatively good harm reduction strategy for my temperament. The whole thing is still sad, though.

3 Equities

Trading in equities in Australia.

I am not super bullish on the Australian economy in general so I would like to have a lot of my investments in international equities. The firm that seemed to offer me the best balance of diversity and price was Interactive Brokers a.k.a. IBKR (referral link). I recommend them based on my experience, but I am not a financial advisor, this is not financial advice, do your own research.

Their vibe is “rough feel but gets the job done” which is more or less what I want in an investment platform. There are too many complicated things going on to get everything smooth. They support sophisticated automated algorithmic trading, have lots of APIs, exposure to lots of markets, automated forex and lots of other smooth stuff. None of it is obvious, but the user manual is good, so I can figure it out.

Previously I used HSBC which was fine but without much diversity of international equities, and occasional weird things like charging me $25 for execution of a single share purchase order and then another $25 for the next $25 shares at the same price, which is the kind of rude behaviour a decent algorithm would have avoided.

4 Cryptocurrency

You can own cryptocurrency in Australia. It counts as a capital asset, so you pay capital gains tax on it.

There are some weird compliance regulations that are specific to this jurisdiction that as far as I can tell we do not need to care about, because the exchanges handle them for us, but which clearly leads to a small number of exchanges being available in Australia.

Observationally, institutions which handle cryptocurrencies in Australia seem to handle only cryptocurrencies, and not other asset classes; so Revolut in Australia will let me “buy” cryptocurrencies, but not transfer them to other exchanges or swap them for anything but AUD, so it is purely a speculative instrument not a medium of exchange. Binance in Australia won’t even handle AUD; I have to purchase stablecoins, which is tedious because AFACIT technically that incurs a tax event twice, once when I purchase the stablecoin and again when I use the stablecoin to purchase the cryptocurrency I actually want.

I am not so deeply into crypto that I can be bothered optimising all this, but let me know if I am being an ass.

5 Superannuation

How we save for retirement in Australia.

6 ESG investing

I am not going to weigh in on the effectiveness of ethical investing to do good in the world. That is an interesting thing to question, but out of scope for the moment.

Strict pro-social superannuation/retirement funds in Australia include Australian Ethical and Future Super (the former includes a referral code). More relaxed ESG priorities are claimed by other funds, e.g. AustralianSuper. Other funds run ESG sub-funds, although I forgot to write those down, so google for yourself.

Wholesale Fees for Australian Ethical’s managed funds are IMO reasonable if you have AUD25K or meet some other criterion to be a “wholesale” investor. On the down side, their portfolio reporting is really bad. Expect to spend much time transcribing their PDFs into a spreadsheet for tax compliance purposes, or laboriously hunting for annoying Excel download buttons.

Sustainalytics provides reports into the impact of various investments.

7 Accounting and invoicing

Saasu and Xero work out of the box for the Australian tax and compliance environment.

hiveage can be made to support Australian taxes with their custom tax configuration, but it is ugly.