November 2025

Australia’s economy remained under pressure in October with a surprise bump in inflation, dampening hopes of a rate cut and prompting some economists to predict the next move in interest rates may be an increase.

Headline CPI rose to 3.2% in the September quarter, up from 2.1% in June, the highest quarterly rise in more than two years.

News of the higher-than-expected inflation numbers was followed by the biggest daily fall in the Australian share market in two months. Wall Street ended the month subdued with mixed results over concerns about no further rate cuts this year but optimism about US-China relations after a positive meeting between the leaders.

The lift in inflation appears to have rattled consumers. The Westpac–Melbourne Institute Consumer Sentiment Index fell 3.5% in October, adding up to a 6.5% drop in the past two months after gains between May and August when rate cuts were giving a boost.

The Aussie dollar strengthened by the end of the month, closing at US65.4c, making up some of the lost ground of the previous fortnight.

Unemployment rose to 4.5% in September, the highest in nearly four years.

Investing in rare earths requires patience and perspective

Few investment sectors combine geopolitical intrigue, technological innovation and long-term growth potential quite like rare earth elements (REEs).

For Australians, the recent deal with the United States to supply rare earths to seed US$8.5 billion worth of new projects, has thrust the sector into the spotlight.ⁱ

What are rare earths?

Rare earth elements are a group of 17 metallic elements that, despite the name, are not particularly rare but are difficult and costly to refine. Their unique properties are essential in the powerful magnets that drive electronic devices such as headphones, speakers and computers, wind turbine generators, electric vehicles and medical technology such as magnetic resonance imaging (MRI).ⁱⁱ

Almost half of the world’s known reserves of rare earths are in China. It’s estimated 44 million metric tonnes dwarf our 5.7 million and the 1.9 million in the United States. Brazil has about 21 million metric tonnes.ⁱⁱⁱ

Production and processing

Reserves are one thing but production and processing is what makes the difference for investors.

China is leading the field by a wide margin. It extracted and processed some 270,000 tonnes in 2024. The US was next with 45,000 tonnes, followed by Myanmar (31,000) and Australia, Nigeria and Thailand, each on 13,000 tonnes.^iv

Australia’s strategic position

The deal recently signed in Washington – the US-Australia Framework for Securing Supply of Critical Minerals and Rare Earths – commits both countries to investing at least US$1 billion each over the next six months to accelerate mining, processing and supply chain development for critical minerals.

Two of the projects were announced by Prime Minister Albanese after his recent meeting with US President Trump.

One project, the Alcoa-Sojitz Gallium Recovery project in Western Australia, will provide up to 10 per cent of total global supply of gallium, essential for defence and semiconductor manufacturing.

The second, the Arafura Nolans project in the Northern Territory, aims to supply 5 per cent of global rare earth demand by 2029.^v

A recently announced third project, Astron Corporation’s Donald Rare Earth and Mineral Sands project in western Victoria, is expected to become the fourth-largest rare earth mine in the world outside China.^vi

The landmark Australia-US deal is a response to China’s dominance in the rare earths market and Beijing’s recent export restrictions on rare earths, which have left many nervous about vulnerabilities in the supply chains for defence and high-tech industries.

Investment opportunities and risks

For some investors, rare earths may be seen as a long-term opportunity given a prediction by the International Energy Agency that demand could double by 2040.^vii

There are several ways to invest including:

• Directly in ASX-listed companies such as Lynas Rare Earths (LYC), Arafura Rare Earths (ARU) or Iluka Resources (ILO)
• Through exchange traded funds (ETFs) or managed funds that offer exposure to rare earths miners and processors
• In private equity and venture capital. For high-net-worth investors, early stage mining and processing ventures may offer high risk, high reward potential

Of course, there are risks worth considering including geopolitical volatility, growing environmental concerns over the high water and energy demands, and China’s ability to flood the market or further restrict exports, which could cause price volatility.

In any case, patience will be required. Mines can take as long as seven years to become operational.^viii

The bottom line for investors is while rare earths are a sector still maturing, they are critical to a range of industries and expected to increase in value over the next decade. However, their share prices are sensitive to global headlines, politics and policy changes, so volatility is to be expected – particularly in the current environment. 

As always, there is a lot to consider when weighing up investment opportunities and we are here to discuss any aspect of your investment strategy.

i Historic critical minerals framework| Prime Minister of Australia

ii What Are Rare Earth Minerals Used For? | The Institute for Environmental Research and Education

iii, iv Mapping rare earth supplies | ABC News

v Historic critical minerals framework| Prime Minister of Australia

vi Donald rare earth mine given major project status | ABC News

vii Outlook for key minerals | IEA

vii Many details remain buried in Australia-US rare earths deal | Crikey

Super tax shake up

Superannuation tax rules are changing again and there are implications for those with very large balances as well as those on lower incomes.

In a nutshell, the new plans include:

• more targeted tax rules for people with very large super balances
• extra support for low-income earners who contribute to super
• indexation (automatic increases) to make sure the tax thresholds keep up with inflation
• the removal of the proposed tax on unrealised gains

The new super tax rules will begin on 1 July 2026 and will be based on your total super balance as at 30 June 2027.

The changes follow feedback from industry groups, financial experts, and the public. Treasurer Jim Chalmers said the updates are designed to make the system fairer while still meeting the government’s goals.ⁱ

New rules for higher balances

If your total super balance (TSB) is more than $3 million, you’ll be affected by new tax rates on earnings.

Here’s how it works:

• for balances between $3 million and $10 million, earnings will be taxed at 30 per cent instead of the usual 15 per cent for the proportion of earnings between the thresholds
• for balances over $10 million, a tax of 40 per cent will apply on the proportion of earnings over the threshold

These are still concessional rates, meaning they’re lower than the top personal income tax rate, but they’re higher than the standard super tax rate.

The thresholds will be indexed over time. The $3 million threshold will increase in steps of $150,000 while the $10 million threshold will increase by $500,000 each time.

This means fewer people will be affected in the future as the thresholds rise with inflation.

Only a small number of Australians will be affected by the new rules. Less than 0.5 per cent of super account holders are expected to have balances exceeding $3 million in the 2026-27 financial year. The $10 million rule is expected to apply to fewer than 8,000 accounts, less than 0.1 per cent of all super accounts.ⁱⁱ

If you’re affected, you can choose to pay the tax from your super account or from funds outside of super.

No tax on unrealised gains

One of the most controversial parts of the original proposal was a tax on unrealised gains, meaning increases in the value of assets that haven’t been sold yet (such as property or shares).

This idea has now been dropped.

Instead, the new tax will only apply to realised gains (actual earnings such as interest, dividends or profits from selling assets).

Extra top-up for low income earners

The government is increasing support for low-income earners through the Low Income Superannuation Tax Offset (LISTO).ⁱⁱⁱ

LISTO is a 15 per cent tax offset paid by the government into the super accounts of people earning up to $37,000 a year and is worth up to a maximum of $500.

From 1 July 2027, the current LISTO income threshold will increase to $45,000 to match the top of the second income tax bracket. Around 3.1 million Australians will then be eligible for LISTO.

The maximum government top-up payment will also be increased from $500 to $810 to account for the recent increase in the Superannuation Guarantee (SG) rate to 12 per cent.

Special rules for defined benefits funds

Some judges and politicians are members of defined benefit super funds, which work differently from regular super accounts.^iv

Because it’s harder to calculate earnings in these funds, the government will develop equivalent arrangements to apply the new tax fairly.

We’re here to help you understand how the changes may affect your super and your long-term financial goals, so please give us a call.

i Reforms to support low-income workers and build a stronger super system | Treasury Ministers

ii https://www.superannuation.asn.au/media-release/proposed-super-tax-changes-will-make-system-fairer-for-low-income-workers-asfa/

iii Low Income Superannuation Tax Offset | Treasury.gov.au

iv Super contributions to defined benefit and constitutionally protected funds | Australian Taxation Office.

5 strategies for financially surviving divorce

Divorce can be one of life’s most emotionally and financially disruptive events. Whether you’re in the early stages of separation or rebuilding after a settlement, understanding the financial implications and taking proactive streps can make all the difference.

More than 47,000 divorces were granted in Australia in 2024, down 3 per cent on the previous year. At divorce, marriages had lasted around 13.2 years. The median age of those divorcing was 47.1 years for men and 44.1 years for women.ⁱ

Divorce reshapes your financial landscape, dividing assets, splitting incomes and doubling expenses as two households replace one. The cost of divorce can be as much as $870,000 per couple, according to one estimate, which also finds that women – particularly older women – often experience a 30-45 per cent drop in living standards.ⁱⁱ

This financial strain is compounded by legal fees, potential spousal maintenance, child support obligations and the need to reassess retirement plans.

Step 1: Get a clear picture of your finances

Start by taking stock of your financial position to provide clarity when negotiating settlements and planning your future.

• List all of your assets including property, superannuation, vehicles, bank accounts and investments.
• Identify liabilities, such as mortgages, credit cards and personal loans.
• Detail your income sources including employment, Centrelink, child support and spousal maintenance.

Step 2: Budget for your new life

Post-divorce budgeting is more than balancing numbers. It’s about redefining your financial identity. You may need to adjust your lifestyle, reconsider housing options and build an emergency fund to cushion unexpected costs.

Don’t overlook your credit health. Joint accounts and shared liabilities can affect your credit score, even after separation. Close or convert joint accounts, monitor statements and make sure that bills are paid on time. Maintaining good credit and cash flow is important for securing housing loans and for your future financial stability.

Step 3: Understand asset division and superannuation

Property settlements can be complex and have serious tax implications. Assets acquired before or during a marriage, including super, are usually part of the asset pool. Super accounts can be split as part of a settlement, transferring a portion from one partner to the other, a move that can significantly affect retirement planning.

Don’t forget that timing matters in financial decisions during divorce. Rushing into asset division or investment choices while emotions are running high can lead to costly mistakes. Take time to understand your options, get independent advice and avoid making decisions based on short-term comfort, such as keeping the family home if it will unreasonably strain your budget. A measured approach helps protect your long-term security.

On the other hand, don’t forget there may be legal time limits to settlements both for married people and de facto couples.

Step 4: Plan for tax and legal issues

Divorce can trigger other tax consequences, especially when transferring or selling assets. But make sure you’re aware of the possible capital gains tax rollover relief and stamp duty exemptions that may apply in your circumstances.

It’s also important to update your will, powers of attorney and insurance policies as quickly as possible.

Because these decisions have long-term effects, it’s wise to seek guidance from not only your lawyer but also a tax specialist and we are here to assist you and assess your financial situation.

Step 5: Rebuild with purpose

Once the dust settles, it’s time to rebuild.

Take the time to:

• Set new financial goals
• Develop an investment strategy suited to your risk tolerance
• Maximise your super contributions where possible
• Plan for retirement with revised expectations.

Divorce is a financial reset. While the outlook can seem daunting, there’s also an opportunity to take control of your financial future. With the right advice, you can emerge from divorce not just surviving but thriving.

If you’re facing separation, consider obtaining financial advice early in the process. The sooner you start planning, the better positioned you’ll be to protect your assets, support your family and rebuild a secure future.

Please give us a call if we can help at any stage.

i Marriages and Divorces, Australia, 2024 | Australian Bureau of Statistics

ii 6 Steps to Financially Plan for Divorce | My Wealth Solutions