What are the changes that will impact Aussies on July 1?
As the end of the financial year approaches, there are a few changes on the horizon for Australians.
These changes along with some data will impact people and how they are struggling, according to Finder.
Key changes
Stage 3 tax cuts
The Australian government has announced changes to the proposed stage 3 cuts, planned to come into effect from July 1 this year.
The lowest tax rate (for people earning $45,000 or less) will fall from 19% to 16%.
The 32.5% tax rate will fall to 30% as previously planned, but will now cut off at $135,000.
Anyone earning over $135,000 will be taxed at 37% (this bracket currently starts at $120,000).
The top tax bracket of 45% will now kick in at $190,000 (instead of $200,000).
Minimum wage
Australia’s minimum wage and award wages will increase by 3.75% from July 1, according to the Fair Work Commission.
The decision will see the national minimum wage increase from $23.23 per hour to $24.10 per hour – or $882.80 per week to $915.91 per week – based on a full-time, 38-hour working week.
Paid parental leave
The government’s Paid Parental Leave is changing.
Right now, eligible parents can access up to 100 days of paid leave, or 20 weeks based on a 5-day work week.
From 1 July 2024, you’ll be eligible for 110 days, or 22 weeks based on a 5-day work week.
This increases to 120 days (24 weeks) in July 2025, and 130 days (26 weeks) in July 2026.
The rate of paid parental leave will increase in line with minimum wage to $915.91 per week.
Energy bill relief
The energy regulators have finally released their 2024-2025 default offer electricity prices that will come into effect from 1 July.
For the most part, it’s good news, with prices going down by $17 to $190 over the year, depending on where you live.
Unfortunately for South East Queensland, residential prices are going up by around $83.
All households are eligible for a $300 per year federal rebate, applied as 4 x $75 quarterly credits from July 1.
Depending on your state or territory, you may also be eligible for state-based credits, like Queensland’s $1,000 energy rebate.
Superannuation
The Super Guarantee is increasing to 11.5% on 1 July.
It will then increase by a further 0.5% on 1 July 2025 to 12%.
The before-tax contribution cap in 2024-25 is $30,000, which is up from $27,500 in 2023-24.
The after-tax contribution cap in 2024-25 is $120,000, which is up from $110,000 in 2023-24.
Some relevant Finder data
Finder’s Consumer Sentiment Tracker revealed that 42% of Australians said their rent/mortgage was one of their most stressful expenses in May.
This is followed by groceries (41%), energy bills (24%), petrol (22%), and health insurance.
Meanwhile, Almost 1 in 2 (48%) could only survive off their savings for a month or less if their income dried up tomorrow.
This comes as 2 in 5 (40%) Australians have less than $1,000 in their bank account.
In other words, that’s equivalent to 8.4 million people who have very limited funds to fall back on.
Interestingly, more than 1 in 5 Aussies (23%) admit they have $0 in savings – equivalent to 4.8 million who are completely skint.
Of those who have less than $1,000 on hand, the average bank balance is just $126, barely enough to replace a flat tyre.
Sarah Megginson, personal finance expert at Finder commented:
“July 1 marks a number of financial changes for everyday Australians – many of them positive!
The end of the financial year always brings with it the opportunity to get your finances in order.
But this year, there’s an added incentive to get all your ducks in a row, as you’ll have more money to work with via tax cuts and energy credits.
Tax filing season starts on 1 July, but most people will need to wait a few weeks for an income statement from their employer.
Australians should carefully consider what they do with their returns – think of how you can use the cash boost to your best advantage.
You might want to use it to tackle debt, free yourself from overdue bills, or give your savings account a healthy jumpstart.
It’s a great time to get across all the financial changes coming at the beginning of the new financial year.”
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