Key Changes to Affect Australians from July 1
A raft of changes has come into effect at the start of the new financial year on July 1. Millions of Australians are expected to feel some relief as government measures from tax to wages to superannuation kick in, but not everyone is celebrating.
Winners of the New Changes
Taxpayers
All Australian taxpayers will receive minor relief starting from Wednesday. The tax rate on income between $18,201 and $45,000 will fall from 16 per cent to 15 per cent. Everyone earning more than $18,201 a year will get up to $268 more back in their pockets. Taxpayers will also get a $1000 instant tax deduction for work-related expenses.
This comes after Labor was able to pass its tax package – which includes the two tax deductions and changes to the capital gains tax and negative gearing – with the support of the Greens last week.
Minimum Wage Workers
The Fair Work Commission announced the minimum wage would rise by 4.75 per cent to $26.44 an hour for the second year in a row. This means full-time minimum wage workers will receive $1004.90 more per week, the first time the minimum wage has risen to more than $1000 per week. This also means the minimum wage has gone up by more than $3000 per year, rising to $52,254.80.
Parents
Families with a child born or adopted from July 1 will get an extra 10 days of paid parental leave, bringing the total up from 24 weeks to 26 weeks. The government has also increased the family tax benefits by up to $235.48 per fortnight for each child aged under 13, and to $306.46 per fortnight for each child aged 13 and over. This is expected to benefit more than 1.2 million families.
Households in NSW, Queensland and South Australia
Millions could also see much-needed relief when it comes to their power bills, with electricity bills set to fall across NSW, south-east Queensland and South Australia. There will be a three-hour period of free electricity in the middle of the day for those households. Households are expected to see their bill fall by about 3.4 to 5 per cent in NSW, by 7.2 per cent in south-east Queensland and about 1.4 per cent in South Australia when they move the bulk of their power usage to that free period.
Superannuation
While this change is less tangible, changes to superannuation could help millions of Aussies. Under new Payday Super laws coming into effect on Wednesday, employers must pay superannuation at the same time they pay the salary and wages of their employees, meaning it can reach an employee’s nominated super account within seven days. This means it has the potential to earn more interest.
As it stands, employers are only required to pay superannuation to their workers at least every three months, but this will now change. The way super is calculated has also changed, and it now encompasses more aspects of someone’s work rather than just ordinary time earnings.
Small Businesses
The small business instant asset write-off has been increased to $20,000. Any business making less than $10 million a year can deduct the full amount to help improve cashflow and reduce compliance costs.
Losers of the New Changes
Motorists
Fuel will get more expensive again after the cut to the fuel excise cut was halved. In April, the federal government cut the fuel excise from 52.6 cents per litre to 26.3 cents per litre amid a fuel crisis caused by the war in the Middle East. This was a temporary measure to end on June 30 but the federal government has extended the discount for one more month at a reduced rate. Motorists will only get 16.4 cents off per litre, as opposed to the previous 32 cents, meaning they will see prices increase slightly from Wednesday. The cut will end on August 2.
Truckers and Heavy Transport Industry
The same reprieve was not granted to heavy vehicle users, with a temporary cut to the heavy road vehicle user charge being removed. It means trucks and other heavy vehicles will now have to pay a 32.4 cents per litre tax on fuel. It could put small businesses and independent truckers in jeopardy as the cost of fuel will rise, and the knock on effects could be felt across the country. This is because as fuel costs more, transport businesses will have to charge more to try and cover the costs, which could mean products on supermarket shelves around Australia may go up.
Major Supermarkets
The country’s largest supermarkets like Coles and Woolworths are now banned from price gouging. They will no longer be allowed to charge prices that are excessive compared to the cost of supply and a reasonable profit margin. Supermarkets found guilty will face the greater of these consequences: $10 million; three times the value of the benefit derived or 10 per cent annual turnover during the preceding 12 months.
Federal Politicians
While federal politicians aren’t losing anything, they won’t be gaining anything in their pay packet this financial year. In the last two years, politicians received pay rises of 3.5 per cent and 2.4 per cent respectively. However, the independent remuneration tribunal that decides the pay of members of parliament each year has opted not to give a pay rise on July 1. “While this approach will result in a reduction in real remuneration, it preserves existing relativities and allows the tribunal to consider remuneration outcomes in a more integrated and considered manner,” the tribunal said in a statement. However, a pay rise could come later in the year. The base salary for MPs and senators is $239,270, with additional loadings for leaders, ministers and shadow ministers plus electorate and travel allowances.
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