Unemployment, tax changes and space investing: What to know

Australia’s jobs market is starting to soften, with the latest unemployment figures strengthening expectations the Reserve Bank of Australia (RBA) could hold interest rates steady next month.

Meanwhile, the fallout from the federal budget continues, with proposed tax changes prompting fresh debate around wealth planning and investment structures — including testamentary discretionary trusts.

And investors are increasingly turning their attention to space, as the sector emerges as one of the market’s newest — and riskiest — frontiers.

The economy is slowing, and the jobs market is starting to show it

There are fresh signs Australia’s economy is losing momentum.

The unemployment rate climbed to 4.5 per cent in April, the highest level since late 2021, with nearly 19,000 jobs lost during the month. Women accounted for much of the decline, while youth unemployment also increased.

The labour market remains relatively resilient. But historically, economists say, the rise suggests higher interest rates and global uncertainty are beginning to bite.

Businesses are also becoming more cautious. Slower consumer spending, higher borrowing costs and rising input prices are all weighing on confidence.

It means the RBA is likely to hold off on lifting interest rates at its next meeting in June — but inflation remains a problem.

The next set of official inflation figures will be out on Wednesday.

Budget tax changes are reshaping investment and wealth planning

The federal budget’s proposed tax overhaul continued to dominate financial conversations this week, particularly around capital gains tax (CGT) and family wealth structures.

On Friday, the government signalled it was open to discussing its proposed changes to discretionary testamentary trusts.

A testamentary trust is created through a will, but only comes into effect after the person dies.

In its most basic form, it can hold investments such as property, shares, and cash to help preserve the assets.

The income they produce can then be distributed to chosen family members and adjusted every year — even to children who are taxed at adult rates.

This can effectively lower the total tax paid by a family over many years if the income falls into lower tax brackets.

The proposed budget changes, however, attract a 30 per cent minimum tax instead.

Meanwhile, many small businesses and start-up operators are concerned that the proposed CGT changes will stifle innovation.

Is space the next big investment frontier?

The global space economy moved further into the spotlight this week after Elon Musk opened the books on space exploration company SpaceX ahead of its expected share market debut.

The company lost nearly US$5 billion ($7 billion) last year, despite generating around US$18 billion ($25.2 billion) in revenue. Yet investors are still expected to value the business at an extraordinary US$1.75 trillion ($2.45 trillion).

At that level, it would become the biggest market debut in history.

The excitement highlights how rapidly the space sector is evolving beyond rockets and satellites into a broader commercial industry involving telecommunications, defence, artificial intelligence and data infrastructure.

Some analysts believe it could spark a wave of major technology listings, including companies tied to artificial intelligence and advanced computing.

For everyday investors, the space economy remains high risk, with some analysts describing it as “a concept, a vision and an idea”. But it also shows where global investment trends are heading as technology reshapes industries and financial markets.

That’s this week’s On the Money wrap. Prefer to listen? The On the Money podcast breaks down the latest every weekday. You can tune in here or wherever you get your podcasts.

For the latest from SBS News, download our app and subscribe to our newsletter.