Meridian Wealth Management

16/06/2026

The Reserve Bank of Australia has held the cash rate steady at **4.35%** at its June 2026 meeting.

Following three rate hikes earlier this year, financial conditions have tightened, consumer spending is slowing, and housing prices are cooling in several capital cities. However, both headline and underlying inflation remain stubbornly high, further aggravated by ongoing global oil supply disruptions.

The Board is keeping a close eye on economic data to ensure inflation doesn't become deeply embedded. They remain prepared to lift rates again if required to hit their target.

29/05/2026

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13/05/2026

Spin, higher taxes and questionable "relief" in uncertain times

Treasurer Jim Chalmers has labelled the 2026 Federal Budget as "the most important and ambitious budget in decades" — a claim that will likely be met with scepticism by many Australians already feeling the strain of rising costs and growing tax burdens.

Framed as a response to global uncertainty, the Treasurer told Parliament the Budget would "take pressure off Australians" while delivering a stronger economy and better tax system. Yet beneath the rhetoric, the reality appears far less reassuring, with households being asked to shoulder more while being offered what can only be described as token relief.

Under the banner of ‘reform and resilience’, the Government claims it is stabilising the economy at a time of global instability driven by conflict and oil shocks. However, many will question whether the so‑called "resilience" simply translates into higher taxes and more intervention, while Australians are told to be grateful for minimal concessions.
For households and wage earners, the Budget offers a mix of tightly targeted handouts and long-term structural changes — many of which delay meaningful relief while introducing new ways for the government to collect more revenue.

THE BIG PICTURE
At a headline level, the Budget forecasts a $31.5 billion deficit in 2026–27. While the Government presents this as an improvement, it still represents a massive shortfall that ultimately falls back on taxpayers.

Economic growth is expected to slow, inflation is set to spike again, and yet the Government continues to promise a distant return to budget balance sometime in the mid‑2030s — a timeline so far out that it offers little comfort to those dealing with rising costs today.

Despite repeated assurances that "budget repair" is being driven by savings rather than tax increases, the details suggest otherwise. The overall direction points clearly toward extracting more tax from investors, business structures, and wealth creation, while offering modest concessions to wage earners to soften the blow.

COST-OF-LIVING
The Government has gone to great lengths to claim its cost-of-living measures won’t add to inflation — but many Australians may struggle to notice any real difference.

The headline initiative, a $250 tax offset, doesn’t even arrive until the 2027–28 income year — hardly urgent relief for households already under pressure. Similarly, the simplified $1,000 deduction is more about administrative convenience than meaningful financial support.

Income tax cuts are being heavily promoted, yet the reductions are marginal and gradual, trimming rates by just a percentage point or two over several years. Against the backdrop of rising living costs, bracket creep, and stealthy revenue collection elsewhere, these "cuts" will feel underwhelming at best.

PRODUCTIVITY
The Budget talks up productivity, but much of the promised benefit rests on optimistic assumptions about reduced red tape and improved infrastructure delivery.

While billions are allocated to housing and transport, these long-term projects offer little immediate relief and do not address the structural pressures driving costs higher today. For many businesses and investors, the so‑called reforms may feel like a trade-off: more regulation in some areas, marginal improvements in others.

TAX REFORM
The most contentious element of the Budget is its clear shift toward higher taxation on investment.

Changes to negative gearing and capital gains tax represent a significant tightening, particularly for property investors. Limiting negative gearing to new housing and scrapping the 50 per cent CGT discount in favour of indexation effectively increases the tax burden on investment — dressed up as "fairness" and "rebalancing."

Similarly, the introduction of a minimum 30 per cent tax rate on discretionary trust distributions signals another move to close off legitimate tax structures, further reinforcing the Government’s intent to broaden its tax base.
While these measures are justified as addressing inequality, they also risk discouraging investment, reducing flexibility, and ultimately pushing more Australians into higher effective tax rates.

HOUSING AFFORDABILITY
Despite billions in spending and bold claims, the Government’s housing strategy relies heavily on intervention and restrictions, including extending the ban on foreign buyers.

While additional funding and infrastructure may support new housing over time, there are legitimate doubts about whether these measures will genuinely improve affordability — or simply add complexity and cost to an already strained system.

HEALTH, AGED CARE AND SPENDING GROWTH
Significant increases in health, aged care and defence spending highlight another underlying trend: expanding government expenditure.

While these investments may be necessary, they add to long-term fiscal pressure, raising the obvious question — who ultimately pays? The answer, increasingly, appears to be taxpayers through both direct and indirect means.

FUTURE "RESILLIENCE"
The Government’s focus on national resilience — from fuel security to defence — comes with a hefty price tag. Measures such as reserving gas supply and increasing defence spending by $53 billion reflect a growing role for government intervention and control.

While positioned as necessary safeguards, these policies add to costs and uncertainty, particularly for industries already grappling with regulatory pressure.

LOOKING AHEAD
The economic outlook remains uncertain, with risks of higher inflation, weaker growth, and rising unemployment still firmly on the table.

Yet instead of delivering immediate and meaningful relief, the Budget leans heavily on long-term promises, modest concessions, and significant tax changes that broaden the government’s revenue base.

For many Australians, this Budget may feel less like support and more like being asked to pay more now in exchange for benefits that may — or may not — arrive years down the track.

05/05/2026

The Reserve Bank of Australia has increased the cash rate by 0.25 per cent to 4.35 per cent.

Great for savers, not so good for borrowers

24/03/2026

MARKET UPDATE: Recent Falls, Economic Indicators & Geopolitical Drivers

1. Overview of Recent Global Market Volatility
Global equities have experienced heightened volatility through March 2026, driven primarily by geopolitical escalation in the Middle East—particularly the conflict involving the US, Israel, and Iran. Markets worldwide have shown significant stress reactions, including Europe, the UK and Asia, as rising energy prices and geopolitical risk premiums feed into inflation expectations and risk off investor behaviour.

• The conflict has materially raised oil and gas prices as fears of supply disruptions intensified, especially due to Iran’s strategic position near the Strait of Hormuz, a corridor for ~20% of global oil and LNG transport.
• Brent crude prices have spiked above US$100 per barrel, reflecting increasing supply risks.

This renewed energy shock has driven global equity selloffs, with the UK’s FTSE 100 falling more than 3% in a single session, and Europe experiencing even sharper declines. While these reports are global, the ASX has not been immune to the same pressures.

2. How the Middle East Conflict is Affecting the ASX
Although the available articles specifically quantify markets such as the FTSE, Europe, India, and broader global markets, the ASX is exposed through similar mechanisms:

a. Rising Energy Prices → Higher Inflation Expectations
Higher oil prices function like a tax on households and businesses. They flow into:

• Transport and logistics costs
• Input costs across manufacturing and retail
• Broader consumer inflation

Oil price shocks are historically negative for equity markets outside the energy sector. The escalation in Iran has already caused traders to price in higher inflation risk globally.

b. Increased Volatility and Risk Aversion
As markets absorb rising energy costs and geopolitical risk:

• Investors shift into defensive assets
• Cyclical and growth exposed sectors typically underperform
• Higher beta markets like Australia feel the pressure

This pattern is consistent with global market reactions, where volatility has jumped and investors are closely tracking conflict developments.

c. Supply Disruption Concerns
Australian markets are indirectly exposed via:

• Global oil prices
• Asian economic slowdown (Australia’s key trading partners) if energy costs stay elevated
• Risk of slower global growth reducing demand for Australian exports

Iran’s position and threats around the Strait of Hormuz remain a material risk factor.

3. Domestic Australian Economic Indicators & Their Relevance
Although the articles focus primarily on overseas markets, the economic mechanisms they describe apply directly to Australia.

Key domestic indicators to watch include:
1. Inflation Outlook
Oil price spikes directly affect Australian CPI through:
• Fuel
• Airfares
• Freight costs feeding into food and goods inflation
Inflationary pressure could delay or reverse expectations for RBA rate cuts.

2. Interest Rates
Any inflation resurgence may:
• Force the RBA into a more hawkish stance
• Tighten financial conditions
• Put further pressure on interest sensitive sectors on the ASX (technology, real estate, discretionary retail)

3. Consumer Confidence
Geopolitical uncertainty, rising fuel prices, and lingering cost of living pressures could weaken consumer sentiment—impacting domestic facing sectors.

4. Global Growth Expectations
Slowdowns in the US, Europe, or Asia due to energy shocks ripple into:
• Commodity demand
• Export volumes
• ASX resource sector earnings

4. Why the ASX Is Falling: Synthesis of Factors
The current ASX weakness can be framed around three main pillars:

1. Geopolitical risk premium rising
Markets are pricing in:
• Oil supply threats
• Potential for broader regional escalation
• Higher global inflation
This is directly tied to the Iran conflict and its impacts on commodity markets.

2. Global market contagion
Sharp selloffs in the UK, Europe, India, and US futures markets create spillover pressure on Australian equities.
For example, Indian indices fell sharply due to rising crude prices from Iran–US tensions.

3. Domestic sensitivity to global conditions
Australia’s economy is deeply integrated with global energy, commodity, and trade flows.
Thus, even without local catalysts, the ASX is responding to:
• Higher energy prices
• Rising inflation expectations
• Potential central bank hesitation on policy easing
• Lower risk appetite across global investors

5. Definitions: Market Correction vs Market Crash

Market Correction
A market correction typically means:
• A decline of 10% to 20% from recent highs
• Usually short term
• Often driven by sentiment shifts, technical factors, or event driven shocks
• Markets often recover relatively quickly once uncertainty normalises
Corrections can be event driven—for example, geopolitical events, pandemics, or natural disasters.

Market Crash
A market crash is more severe:
• A rapid decline of 20%+ over days to weeks
• Typically accompanied by high volatility, panic selling, and sharp liquidity withdrawal
• Can be triggered by systemic factors or significant economic deterioration
• Crashes often precede recessions or are caused by structural financial system stresses
Crashes are more often fundamentals driven, such as:
• Banking system failures
• Credit events
• Housing crises
• Corporate earnings collapses
• Prolonged high inflation / economic contraction

Though event driven factors can cause crashes, they tend to do so only when they materially impair economic fundamentals (e.g., oil shock triggering global recession).

6. Event Driven vs Fundamentals Driven Market Moves

Event Driven Market Movements
• Caused by sudden external shocks
• Effects often sharp but temporary
• Examples: wars, natural disasters, political announcements
• Markets usually stabilise when clarity returns
The Iran–Middle East conflict is currently an event driven shock, causing rapid repricing around energy supply and inflation expectations.

Fundamentals Driven Movements
• Caused by deterioration in underlying economic conditions
• Declines last longer and recover slower
• Related to earnings, GDP, unemployment, interest rates, structural issues
If elevated oil prices persist and push inflation materially higher, this event driven shock could evolve into a fundamentals driven downturn.

Conclusion
The ASX’s recent pullback reflects a classic event driven correction, tied largely to the Iran–Middle East conflict and its impact on global energy markets. Rising oil prices are feeding into higher inflation expectations globally, prompting investors to reassess risk. While domestic economic indicators remain an important watchpoint, the primary driver at present is geopolitical uncertainty and its knock on effects.

19/12/2025

13/06/2025

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09/08/2024

Stay up to date with what's happened in markets and the Australian economy over the past month.

While the anxiously awaited release of the latest inflation data at the end of July, showed an increase, it was in line with economists’ predictions.

Given the RBA wants inflation back within a 2-3% target range by the end of 2025, there were concerns about the inflation figures and the implications for the cash rate.

The ASX finished the month strongly with an increase of around 4%, riding out a mid-month plunge and surging to a record high for the ninth time this year.

Click the video below to view our update.

09/07/2024

Stay up to date with what's happened in markets and the Australian economy over the past month.

Despite some signs of a weakening economy with stalling growth and a softening labour market, persistently high inflation is acting as a roadblock to the RBA’s possible rate cuts.

Markets have now priced in a risk that the RBA could hike rates as soon as the next meeting in August.

Australian shares finished the month close to where they started, with investor sentiment influenced by news of higher inflation and fears of another interest rate hike.

Click the video below to view our update.