Everything you need to know about changes coming July 1
Major Financial Changes Coming to Australia from July 1
Starting July 1, Australia’s financial landscape will undergo significant changes, impacting everything from taxes and minimum wages to energy costs and superannuation.
Tax Cuts and Financial Relief
All Australians will benefit from the stage 3 tax cuts, providing a much-needed cash boost. According to new data from consumer comparison website Finder, this assistance is timely. Their research reveals that 40% of Australians have less than $1000 in their bank accounts, and nearly half could only survive for a month or less if their income were to stop.
Remarkably, 23% of Australians, or about 4.8 million people, report having no savings at all.
Sarah Megginson, a personal finance expert at Finder, suggests that July 1 marks an excellent opportunity for Australians to reassess and improve their financial situation. “The end of the financial year always brings with it the opportunity to get your finances in order,” she says. “This year, there’s an added incentive with the extra money from tax cuts and energy credits.”
As tax filing season begins on July 1, Megginson advises waiting a few weeks for an income statement from employers before making any decisions. She encourages Australians to think strategically about their tax returns, suggesting that the cash boost could be used to pay off debt, settle overdue bills, or jump-start savings.
Key Changes Effective July 1
Stage 3 Tax Cuts
Australians will receive between $350 and $4500 extra annually, depending on their income bracket. NAB's data indicates that 36% plan to save this extra money rather than spending it on non-essentials. Among Gen Z, 53% will save, and 49% of those earning between $100,000 and $150,000 will also choose savings over spending.
Moreover, 29% plan to use the extra cash to counter higher living costs, 22% will pay down debt, and many are saving for holidays, homes, or retirement. On average, Australians aim to reach about $17,000 in savings.
Minimum Wage Increase
Effective July 1, the minimum wage will rise by 3.75%, increasing from $23.23 per hour to $24.10 per hour, or from $882.80 per week to $915.91 per week for a full-time, 38-hour workweek. This adjustment impacts 20.7% of workers under modern award rates and a small fraction of those on the minimum wage.
Paid Parental Leave
Parents will see an increase in paid leave, rising from 100 days (20 weeks) to 110 days (22 weeks) based on a five-day workweek. This will further increase to 120 days (24 weeks) in July 2025 and 130 days (26 weeks) in July 2026.
Energy Bill Relief
A highlight of the federal government's May budget is energy bill relief. Ten million households will receive $300 in energy bill rebates, while one million small businesses will benefit from a $325 rebate. These credits will be distributed in quarterly installments over the financial year, costing the budget $3.5 billion.
Treasurer Jim Chalmers explained that the energy bill support is part of a broader "cost-of-living" relief package, designed to assist Australians across various income levels.
Superannuation Guarantee Increase
The superannuation guarantee will rise to 11.5%, with a further increase to 12% scheduled for July 1, 2025.
These changes offer a significant opportunity for Australians to bolster their financial stability, manage expenses, and plan for the future. Now is the time to reassess and optimize personal finances to make the most of these new policies.
