Here Is What You Need to Know About New Laws and Changes for Australians From July 1, 2018

June 24, 2018 Updated: June 30, 2018

The start of a new financial year will bring in a raft of changes to fees, taxes, welfare, and even how you shop. Here are some notable changes that might affect you and your family across Australia.

Plastic Bag Ban

From July 1, Queensland (QLD) and Western Australia (WA) will be joining the Australian Capital Territory (ACT), Northern Territory (NT), South Australia (SA), and Tasmania (TAS) in banning single-use plastic bags from all retailers.

The Victorian (VIC) government announced a ban on single-use plastic bags in 2017 but has yet to confirm a start date. The government has consulted with the community in order to develop future approaches to manage plastic pollution in the state and design a way to phase out plastic bags.

New South Wales (NSW) is now the only state in Australia that does not have a compulsory ban. However, most big supermarkets such as Coles and Woolworths are phasing out plastic bags use across the state, as well as for the rest of the nation, by July 1.

Along with plastic bags, Coles has committed to reduce the use of plastic packaging in its fresh produce section and increase it that amount of material that it can recycle. Woolworths announced that it will stop selling single-use plastic straws and reduce the amount of plastic packaging used for its fruit and vegetables.

Power Prices

Despite rising network and renewable energy costs, the country’s big-three power retailers Origin, AGL, and Energy Australia announced that they will lower power prices for households and businesses across several states.

The announcements offer Australia families a small reprieve from hiking power bills, after up to 20 percent increases last financial year and a doubling in prices over the past decade.

Origin is set to lower electricity prices for households by 1.3 percent across QLD and 1 percent in SA. In NSW and ACT, Origin household electricity prices will stay flat but NSW households will experience a 3 percent drop in their gas bills.

Businesses with Origin in QLD and SA will see a respective 4 percent and 1.4 percent cut in electricity prices while businesses in NSW and ACT will see a cut in gas prices by 4 percent and 1.9 percent respectively.

AGL customers across NSW, QLD, and SA will see some changes in their power bills. For households, NSW will see a 0.3 percent cut, QLD will have a 1.6 percent drop and SA a 0.4 percent cut in electricity prices, but households in NSW and SA will see a 1.8 percent and 2.1 percent increase in gas prices respectively. For businesses, NSW will see a 0.1 percent cut, QLD will have a 1 percent decrease and SA a 0.3 percent drop in electricity prices, but businesses in NSW and SA will see a 2.5 percent and 4.6 percent increase in gas prices respectively.

Energy Australia announced on June 15 that it will slash electricity prices for QLD. Households in QLD will experience an $80 or 3.8 cut and businesses will see a $470 or 7.2 percent cut in their electricity bill. Energy Australia’s NSW customers on its new fixed-rate Secure Saver plan would save around $65 or 3% a year. The revised rates will be effective on July 2.

EnergyAustralia Managing Director Catherine Tanna said both the Hazelwood and Northern coal power stations “shutting on short notice was a shock to the market.”

“Ever since, families and small businesses have had a tough time keeping the lights on and their energy costs under control.”

Tanna said progress towards the federal government’s National Energy Guarantee, with a focus on both reliability and emissions, is a step towards ensuring long-term investment and a more “affordable, reliable” energy system.

The company’s decision to absorb costs “is the first tangible sign that the pressure on household power bills is easing,” Tanna said, according to a press release.

Online Shopping Tax

Online shopping might become a little more expensive after new tax laws come into effect on July 1. Overseas businesses with an annual turnover greater than $75,000 selling goods in Australia will be charged a 10 percent GST on goods that are $1000 or less.

While some businesses may absorb the 10 percent tax, it is expected that most overseas businesses will add the new charge at the checkout in order to cover the cost.

In response to the tax, Amazon announced that it will stop shipping to Australia from its international store. According to Amazon, its Australian store will still continue to operate.

Passport Photos

From July 1, glasses will not be allowed to be worn in passport photos. This move was made to “further strengthen the integrity of the Australian passport,” according to the Department of Foreign Affairs and Trade.

“Research has shown that glasses adversely affect passport facial matching. Matching is more accurate without glasses,” the department said.

A limited exemption will be available for people who cannot remove their glasses for medical reasons.

Minimum Wage Increase

The Fair Work Commission announced a 3.5 percent increase to the minimum wage for Australia’s lowest paid workers. The increase will apply from the first full pay period starting on or after 1 July.

The new national minimum wage will be $719.20 per week or $18.93 per hour. The increase will not affect people who are being paid more than the new minimum wage.

Tax Relief

The federal government’s $144 billion package for income tax cuts was passed on June 21 and is comprised of three stages that will come into effect over the next seven years. The first two stages will begin on July 1.

The first stage will give low- and middle-income earners a new tax offset.

People earning up to $37,000 a year will receive a maximum offset of $200, while taxpayers earning between $37,000 to $90,000 are entitled to a maximum offset of $530. People will be able to claim this tax relief up until the 2021-22 income year.

The offset is in addition to existing offsets for low-income taxpayers and will be paid as a lump sum payment after a tax return is lodged. Therefore, the rebate will start being paid from the middle of next year onwards after people lodge their 2018-19 tax return.

The second stage of the package will provide bracket creep relief to low- and middle-income and younger Australians earning between $37,000 to $120,000.

The top threshold for the 19 percent tax bracket will be increased from $37,000 to $41,000, providing a tax cut of up to $540 a year.

The 32.5 percent tax bracket will also be expanded to raise the top threshold from $87,000 to $90,000. This amounts to a saving of about $135 per year for three million Australians.

The third stage of the package will start in 2022 and is aimed at flattening the tax brackets.

Family Payments

A number of changes have been made to Family Tax Benefit (FTB) payments. The most notable change is a $28.28 reduction in part A payments per fortnight for each child that has not been immunised.

The government is also overhauling the Child Care Subsidy Scheme by combining the existing two subsidies into a single payment. Families that are currently receiving the child care benefit and or child care rebate for approved care may be eligible to transition to the Child Care Subsidy or the Additional Child Care Subsidy—a new childcare package scheme starting on July 2. The Additional Child Subsidy is a top-up payment to the Child Care Subsidy to assist children facing barriers in accessing affordable child care.

All families receiving the current payment should have received a letter in April this year informing them about the new package and instructions on how to transition to the scheme. Families may be required to do an online assessment or online claim.

Superannuation Contribution

As part of the housing affordability package, the federal government introduced a scheme that allows older Australians aged 65 and above to make non-concessional contributions into their superannuation from the proceeds from the sale of their home.

The measure aims to reduce barriers for older Australians to downsize and enable a more effective use of the housing stock by freeing up larger homes for younger, growing families.

People who are eligible can choose to make a contribution of up to $300,000 to their superannuation from selling their family home. The “downsizing” contributions can be made for the sale of only one home and is not affected by current contribution caps.

Eligibility depends on a number of factors such as the length of time of home ownership and the type of home. The measure will only apply to property sales made on or after July 1.

Imported Packaged Foods

From July 1, all packaged food imported to Australia must comply with the Country of Origin Food Labelling Information Standard 2016. Country of Origin labelling has been mandatory for a number of years but current labels such as “made with Australian and imported ingredients” have been confusing to consumers.

The changes will introduce new labels making it easier for consumers to see the percentage of Australian-produced content in the imported food. For Australian grown, produced, or made food, the label will show a kangaroo with a standard phrase that it was grown, produced, or made in Australia (pdf).

Other Changes

Comprehensive credit reporting will become mandatory on July 1 where banks, including the big four, will be forced to share positive as well as negative information about a person’s financial history to other lenders. The result of this measure will allow Australians to have better credit scores and will give them more leverage to negotiate deals with lenders, insurance companies, and telecommunication companies.

– Motorists will see an increase in road tolls in Sydney, Melbourne, and Brisbane as rates will increase by 9 cents.

Single Touch Payroll: Employers with 20 or more employees will be required to report payments as salaries and wages, pay as you go (PAYG) withholding, deductions and other payments, and superannuation information from their payroll or accounting system each time they pay their employees.

–  Penalty rate cuts: For people working in pharmacy, hospitality, fast food,  and retail sectors, Sunday penalty rate cuts will come into effect on July 1. The Fair Work Commission ruling in 2017 will see rates reduced from double-time (200 percent) to time-and-a-half (150 percent) in pharmacy and retail, and smaller rate cuts in fast food and hospitality. The decision to cut penalty rates was supported by businesses but slammed by the unions.

– Company tax: Medium-sized businesses with a turnover up to $50 million will see corporate tax lowered to 27.5 percent. The legislated cuts will then drop to 27 percent in 2024-25, 26 percent in 2025-26 and to 25 percent in 2026-27. Labor leader Bill Shorten expressed the Labor party’s commitment to repeal any tax breaks for medium-sized businesses that have yet to be implemented by the government.

Cathy Zhang contributed to this report

 

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