Life In Australia

Okay, I’m haven’t got rich by the standards of some wealthy individuals - but I’ve done pretty well for myself in the last 12 months. I bought shares in five Australian mining companies a year ago and I sold them last week. I had $100,000 to invest which I split it into four $25,000 chunks and bought:

• Compass Resources CMR at $0.54 per share
• BHP Billiton BHP at $16.30 per share
• Oxiana OXR at $0.83 per share
• Kagara Zinc KZL at $1.19 per share

Following the recent correction in world stock markets and my own feeling that the recent resource boom may have run out of steam - at least for the short and medium term, I sold all of my shares last week for:

• Compass Resources CMR at $3.60 per share
• BHP Billiton BHP at $28.65 per share
• Oxiana OXR at $2.95 per share
• Kagara Zinc KZL at $3.54 per share

The bottom line is, in just one year I grew $100,000 to $373,800. I’ll have to pay capital gains tax on the gain but, fortunately, this is halved because I didn’t sell the shares within a year of buying them. Given the recent carnage in share markets, I was tempted to sell earlier than I did but I held on for the the tax benefits.

So far Australia has proved to be a very lucky country for us. I wouldn’t have thought about investing in mining companies in the UK, but there’s so much stuff in the media about mining here - it’s a huge player in the Australian economy - I read up about it, saw the appetite for Australian metals in Asia and bought shares.

Now I’ll have to decide how I’m going to allocate my gains. I hope it won’t prove to be a case of “a fool and his money are soon parted”.

A $37 billion tax cuts package is coming our way over the next few years. The changes in personal tax from July 2006 work out as follows:

The 30 per cent threshold will rise to $25,001.

The 42 per cent rate will be cut to 40 per cent and the threshold increased to $75,001.

The 47 per cent marginal tax rate will be cut to 45 per cent and the threshold increased to $150,001.

We also pay medicare but that’s much, much less than National Insurance in the UK.

Looking to the (my) future, superannuation for people aged 60 and over will be paid tax free from July 2007.

It looks as if Australia is proving to be the lucky country. Developing countries are hungry for metal ores - which Australia has in abundance. Australian exports are fetching record prices and the economy is very healthy. For years now we’ve been getting tax cuts. Compare this with the UK where Gordon Brown is scratching around for every possible way of increasing taxes.

Australia’s needs for skilled migrants are going to be all the more easily met. It used to be that Brits looking to emigrate to Australia traded off the fact they’d be financially worse off for more sunshine and a better lifestyle. It looks more and more as if Australia may soon offer a higher wage packet as well as the sunshine and better lifestyle. Finding more migrants for Australia is becoming easier every year.