Welcome to Tasplan

The 2007/08 financial year which ended on 30 June 2008 has been an extremely difficult one for investors, not only in Australia, but across the globe.

Fears of rising inflation, led by record high oil prices, together with concern of a slowing world economy and turmoil in global credit markets, has seen financial markets go into decline, and therefore investors’ returns plunge into negative territory.

On one hand, there has been strong growth on the back of a boom in the prices Australia receives for the commodities it exports (eg. iron ore, coal, oil and gas, and other metals).

On the other hand, the year saw four (4) interest rate rises as the Reserve Bank attempted to curb inflation, coupled with a soaring $A. These and spiralling raw material and labour costs made for tough business conditions.

China and India continue to drive the strong resources boom, but there is growing concern of a possible recession in the US and a significant slowdown in other Western economies.

On financial markets, the Australian share-market recorded its biggest fall in 26 years, with the S&P/ASX 200 (Standard & Poor/Australian Securities Exchange - an index measure of the market’s performance) down 16.9% over the year.

The MSCI (Morgan Stanley Capital Index - a measure of the world’s major share-markets) fell by 21.5% over the 12 months.

Sub-prime mortgages

At its simplest, sub-prime lending can be described as high-cost lending, or the practice of providing home loans to borrowers who don’t qualify for the best market interest rates, because of their deficient or adverse credit history. Generally, sub-prime borrowers are low-income applicants, which makes sub-prime lending risky for both home loan lenders and borrowers – for lenders, because people with poor credit histories are involved, and for borrowers, because they may financially commit to a mortgage that's beyond their means to repay. Due to the risk, sub-prime home loans are usually offered at a higher interest rate. Many of the sub-prime mortgages have special honeymoon rates (low interest rates for the first one or two years). When the honeymoon period expires, these mortgages then move to the higher variable interest rate. According to a survey by the Credit Suisse Group, more than 30 per cent of sub-prime borrowers, now staring down the prospect of a higher variable rate, won't be able to meet the monthly payments, and in fact many are already behind on payments for the current honeymoon rate.

Tasplan Super

Taspension

Returns – Financial Year to 30 September 2008*