From the July 2009 issue of Investment Advisor • Subscribe!

July 1, 2009

How to Speak Australian

Sidebar to the Cover Story "Lessons from Down Under"

Anyone who's ever been to an Outback Steakhouse knows the difference between a Bloke and a Sheila, and probably that Foster's is Australian for beer. Below are a few more terms from our friends in the southern hemisphere.

Australian Securities and Investments Commission (ASIC)

The government regulatory body that enforces company and financial services laws to protect consumers, investors, and creditors.

Australian Taxation Office (ATO)

The government's principal revenue collection agency. Its role is to manage and shape tax, excise, and the superannuation systems.

Cooling-off Period

A period during which purchasers of a good or service have the opportunity of deciding not to proceed with a transaction. If this occurs then any money paid out for the transaction is refunded.

Excess

The amount of an insurance claim which the individual is required to pay before the insurer becomes liable to pay on the claim. This amount is specified in the insurance policy.

Interest Free Period

The time allowed, usually 55 days, in which new credit card purchases can be paid off without being charged interest, provided there are no unpaid amounts on the card from previous payment periods.

Managed Fund

An investment that pools money from several investors and uses it to buy a particular type of investment.

Marginal Tax Rates (MTR)

Australia 's sliding income tax rates, ranging from 0% to 47% of an individual's salary.

Salary Sacrifice

Part of an individual's before-tax salary can sometimes be 'salary sacrificed' straight into superannuation, which means it is taxed at a beneficial rate (15%), and paid before income tax (lowering taxable income).

Superannuation

Moneys that workers and their employers put aside in a fund during the working years to use upon retirement.

Superannuation Guarantee

A government requirement that employers pay a minimum amount, equivalent to a certain percentage of each employee's earnings, into a superannuation fund or retirement savings account.

Super Splitting

Moving part of a superannuation from one partner to be used to bolster a spouse's super fund account.

Source: FPA of Australia

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