February 2025 Round Up
With significant shifts in the Australian dollar and changing consumer spending patterns affecting business costs and revenue, understanding the current economic landscape is crucial for business planning. Additionally, new government incentives for electric vehicle fleets present potential cost-saving opportunities. This month, we examine how these economic changes impact your business operations and explain how to access available funding that could benefit your bottom line:
1. Market Changes and their Affect on Your Bottom Line
2. Electric Vehicle Fleet Funding: Government Incentives Available – Read the full article
Market Changes and Their Affect on Your Bottom Line
The end of 2024 brought significant economic changes that affect business costs, consumer behavior, and investments. Here’s what you need to know:
Australian Dollar Drops to 62c – Impact on Business Costs
The Australian dollar fell 10% in just one quarter, ending the year at 62c USD. This marks one of the poorest performances among major global currencies.
What this means for you: If you import goods or services, your costs may increase. If you export, your products become more competitive internationally.
Consumer Spending and Economic Health
Retail sales came in weaker than expected for November, with signs of increasing mortgage stress affecting consumer spending patterns. However, employment remains strong with 36,000 new jobs (above the expected 25,000), and unemployment sits at 3.9%.
What this means for you: Consumers may be more cautious with spending, but strong employment suggests underlying economic stability.
Inflation Update
- Overall inflation (CPI) increased slightly to 2.3% (up from 2.1%)
- Service costs rose 4.2% (down from 4.8%)
- Goods inflation at 0.8%
What this means for you: Price pressures continue but are showing signs of easing, particularly in the services sector.
Investment Markets – Your Super and Investments
[Graph: Equity Market Performance by Region]
The ASX200 finished 2024 up 7.5% despite a -3.3% retreat in December. Global markets, particularly the US (S&P500), performed strongly with a 25% gain. Government bonds are now offering yields over 5% – the highest in years.
What this means for you: Despite December volatility, investment markets delivered positive returns for 2024, benefiting both super funds and private investments.
Looking Ahead – Planning for 2025
Interest rate expectations have shifted, with just one rate cut expected in 2025. The weak Australian dollar will likely influence RBA decisions, and consumer spending patterns warrant close attention, particularly following Christmas trading.
What this means for you: Business planning should consider a potentially extended period of higher rates and currency impacts.
This market report provides market insights to help inform your business and investment decisions. For specific advice relating to your situation, please contact our team.
Electric Vehicle Fleet Funding: Government Incentives Available
The NSW Government is offering funding to help businesses switch to electric vehicles. While their competitive bid round has now closed, their kick-start funding program remains open for applications.
Current Status
- Kick-start funding: OPEN until June 30, 2025 (or until funds run out)
- All evidence must be submitted by June 10, 2025
Are You Eligible?
Your business needs to:
- Operate a fleet of at least 3 vehicles
- Be able to purchase and register vehicles before June 10, 2025
Available Kick-start Funding
Vehicle incentives:
- Small vehicles (under $40,000): $5,000 per vehicle
- Premium vehicles (over $40,000): $7,000 per vehicle
- Commercial vans/utes (2.5-4.5t): $14,000 per vehicle
- Trucks (up to 4.5t): $20,000 per vehicle
Plus charger funding:
- AC smart charger: $4,000 per port
- DC smart charger: $8,000 per port (commercial vehicles only)
Business Benefits
- Save approximately $3,100 in running costs per vehicle annually
- Reduced maintenance costs compared to petrol vehicles
- Support your sustainability goals
- Improved vehicle performance
How to Apply
Visit the NSW Government Energy website to:
- Complete the eligibility check
- Review the kick-start funding guidelines
- Submit your application
For full program details and to apply, visit the NSW Government Energy website or contact us for assistance with your application.
Important: This is not advice. Clients should not act solely on the basis of the material contained in this article. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. This article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval. Liability limited by a scheme approved under Professional Standards Legislation.
