Wherever possible you should try to accelerate the repayment of inefficient debt, and consider replacing it with more efficient debt that can be used to create wealth tax effectively.

This can be done by utilising gearing to create an additional income source and using that additional income source to repay your debt. Also, tax concessions and franking credits created by using gearing for investment can also be used to repay your non-deductible debt.

When looking at ways to reduce inefficient debt, you need to manage and understand your cash flow to ensure that you are making the maximum possible loan repayments.

Debt, structured effectively, can allow you to use any surplus funds to reduce your overall interest cost while at the same time retaining access to these funds should you need them in the future.