1. Deakin University CRICOS Provider Code: 00113B Changes in the Economic Landscape and what it means for you Presented by Craig James Chief Economist CommSec 22 July 2015 WELCOME ADELAIDE ALUMNI TO OUR SEMINAR

2. Craig James, Chief Economist, @CommSec, July 2015

3. Important Information 3 This presentation has been prepared without taking account of the objectives, financial situation or needs of any particular individual. Before acting on the information in this seminar, you should consider its appropriateness to your circumstances and, if necessary, seek appropriate professional advice. Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124 and a Participant of the ASX Group. Examples used in this presentation are for illustrative purposes only.

4. 4 Considerations  Global factors  Australia – short term  Australia – long term  Inflation  Interest rates  Longer term  Investments

5. 5 World economy OK

6. 6 World economy over time In Short  Near “normal” growth So What?  Growth drivers keep changing  Slower advanced economies  The rise of Asia

7. 7 Changing of the guard

8. 8 Australia – Current State of Play In Short  Could do better So What?  Slower economy, weaker super returns  Inflation to stay low  Rates to stay low  Weaker currency

9. 9 Australia – Growth over time In Short  Slower growth  3.5% long-term  2.7% recent average So What?  Temporary/permanent?  Population,productivity important

10. 10 Australia Over Time

11. 11 Inflation contained In Short  2-3% target band  Average 2.4% since 1996 So What?  Rates can stay low  Economic cycle – recessions avoided?

12. 12 Interest Rates In Short  Cash rate to stay low So What?  Inflation important  Affects returns  Lower ‘normal’ rate?

13. 13 Key considerations  Population  Participation  Productivity  Entitlements  Taxation  Trade relationships  ‘Normal’ global economy

14. 14 Future Challenges

15. 15 Future Challenges Source: Productivity Commission

16. 16 Future Challenges Source: Productivity Commission

17. 17 Investments In Short  Long term returns 9%pa So What?  Shares & property  International shift?  Cash under-performs  Economic cycle important

18. 18 Looking ahead  Lower returns possible  Less attractive taxation environment  Tighter entitlements  Diversification important  Government inducements for infrastructure?

19. 19 Response by Older Aussies  Work longer  Spend Kids Inheritance (SKI)  Downsize home  Sea-change; Tree-change  Take out mortgage to supplement income  Reverse mortgage type solutions  Higher risk/return investments

20. 20 Outlook

21. Deakin University CRICOS Provider Code: 00113B QUESTIONS Presented by Craig James Chief Economist CommSec 22 July 2015