Be Old and Get Gifts – December 2025 End of Month Update

Group 1: Australian Tax and Transfer System - The Australian tax and transfer system has evolved, with the post-tax income of individuals aged 75 and above now matching the average income, a significant shift from 25 years ago when it was only 75% of the average [1] - Older Australians, particularly those over 60, now enjoy a post-tax income similar to mid-career working age Australians, which is much higher than that of Australians aged 18-30 [4] - The proportion of Australians over 65 paying tax has halved in the last 20 years, indicating a shift in the tax burden and benefits received by different age groups [6] Group 2: Economic Implications - The Australian Budget is facing a structural deficit, with negative cash balances projected for every year going forward, necessitating potential tax increases or government spending reductions [5] - The ANU Report suggests that budget repair should involve a mix of tax increases and spending reductions targeted at older Australians [6] Group 3: Market Performance - In December 2025, the ASX 200 increased by 3.3%, while the FTSE 100 rose by 2.2%, contrasting with a flat performance of the S&P 500 [7] - For the calendar year 2025, the ASX 200 was up 7%, the FTSE 100 increased by 21%, and the S&P 500 rose by 16%, despite the Slack Portfolio experiencing a negative performance of down 3.1% [8] Group 4: Portfolio Management - The Slack Portfolio has been negatively impacted by significant losses in key stocks, including CSL (-35%), Goodman Group (-17%), and Wisetech (-41%) [10] - Shares in Wesfarmers and Coles Group have been moved from the growth-oriented Slack Portfolio to a Stable Income Fund due to their relatively weak projected growth of 5%-10% [13]