The financial sector has had a very turbulent decade, from times of recession to areas of growth, the financial sector is very unpredictable. Whether we are talking about car insurance, farm insurance or general taxation, the financial sector is all around us. We will now take a look at some of the stories that are trending this month and some of the changes that have gone on in the financial sector.
Many countries around the world have already concluded their tax year. A personal tax accountant will have seen a busy period making sure everybody’s tax is prepared and up-to-date. Tax is always a contentious issue as we all believe we are paying too much tax, however, we need tax to make sure that the country runs as smooth as possible, taking into account all the public sector services that we require. Most income tax is straightforward but we have to also remember that taxation can come in all cases. A tax accountant will be able to assist you with what you have to pay and what deductions you may be entitled to have. For example, rental property tax deductions, if you have a rental property you may be entitled to some form of tax reduction. Some of these things will be tax-deductible and your tax accountant will be able to assist you with these aspects. Taxation nicely leads us on to the next subject that is going to be covered this month.
Public services have come to the spotlight again as the New Zealand minister of finance has finally put money forward for people’s social well-being rather than looking at GDP. This is a feel good move for people to feel that services and things that help them socially with no money. This kind of investment, however, is only really sustainable for a short time as GDP is vital for a company’s growth. The minister has mentioned that he will have a challenging time ahead, but he believes that spending every penny wisely will help the money get to the areas where it is needed the most. Most countries around the world do have some form of austerity to deal with.
The Car Industry
Internationally, the car industry is often used to gauge how a country’s finances are doing. Germany houses some of the most luxurious car manufacturing brands in the world. However, it has recently seen a decline in business due to the trade war between America and China. The tax levies that both countries are putting on their goods is showing a decline in the number of cars that have been purchased in these two countries. This has a knock-on effect to manufacturers in Germany as these two countries buy these products in mass. The ramping up of tariffs by the American Government has meant that China has reacted by doing a similar thing. Car manufacturers around the world are also going to see a decline, as there is a massive push on climate change. All the magic how many factors are currently trying to reduce their emissions so that they can produce vehicles that are fit to meet the standards set by the world’s governments. Small car manufacturers will struggle financially as they may not be able to invest as much money that is needed for developing new products.
Our love affair with the motor vehicle is beginning to fall away; now many manufacturers need to think of new ways to make sure they can protect their balance sheets. The recent shift due to climate change is nothing new, but the world is now taking it very seriously. Protests around the world about climate change are taking place and the pressure on the motorist is getting stronger. The technology is already there for cars that run on electric power, it’s just the infrastructure of the countries to charge vehicles that isn’t ready yet. Having lots of charging points around the country that you live in is fine, but we do need a robust system where we can literally charge our vehicles as and when required, so that our journeys are not disrupted.
Electric vehicles still require electricity to work as the electricity suppliers still produce electricity in power stations. We are now moving away from fossil fuels around the world, but to get a viable alternative to energy, it is proving difficult. There are a number of systems in place that are more environmentally friendly, however, it takes time to ensure that these new production facilities can meet the demands of our power needs.
The New Zealand government is planning to push more money into housing. Most of us will agree that this is a good thing for the housing market, but the need for investment like this comes at a cost. Many of us believe that investing in the housing market in one hand is good because it benefits everybody, but at the same time they need to make sure it doesn’t lead to a recession. The financial markets have to improve for this to be successful. We can’t get away from the fact that we need more houses for people to live in and they need to be affordably priced. This is a common problem across the world as money is tight globally.
As you can see there are a number of areas that we have covered in the financial sector. The financial sector will continue to change over the next few decades as we are still recovering from the world recession in 2010. Most countries have seen a small growth in GDP, which is allowing the governments to invest back into public services, but as we have mentioned previously, this does come with some great risks.