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While you were sleeping: The things that changed on July 1

News

Low income earners and small business will be the main beneficiaries of tax changes that come into operation from July 1 and the start of the new financial year.

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The low and middle income tax offset was extended for another year in the May budget that will provide a tax break from up to $1080 when 2021/22 tax returns are lodged next year.

“This is more money to spend in local businesses, giving them the confidence to take on an extra worker, offer an extra shift or buy a new piece of equipment,” Treasurer Josh Frydenberg and Finance Minister Simon Birmingham said in a joint statement.

For businesses with an annual turnover below $50 billion their tax rate will fall to 25 per cent from 26 per cent, the last in a series of incremental reductions.

Bigger businesses will still be paying a tax rate of 30 per cent.

The turnover threshold for access to a range of small business tax concessions is also rising to $50 billion from $10 billion.

The May budget also announced the temporary loss carry-back regime will be extended by a further year.

OTHER JULY 1 INITIATIVES:

TAX

– Changes to the Research and Development Tax Incentive, that include tax offsets and a rise in the eligibility cap to $150 million from $100 million a year

– Tax relief for small brewers and distillers through the excise remission scheme up to an annual cap of $350,000

– Granny flat arrangements will be exempt from capital gains tax

HOUSING

– Support for first home buyers and single parent families with the release of an additional 30,000 places to eligible applicants under the First Home Loan Deposit Scheme, the New Home Guarantee program, and the Family HomeGuarantee

SUPERANNUATION

– The government will require superannuation products to meet an annual objective performance test with funds that fail the test required to inform members, while persistently underperforming products will be prevented from taking on new members

– Self-managed superannuation funds to be made more flexible with the maximum number of allowable members increased from four to six

– The temporary reduction in superannuation minimum drawdown rates extended to the 2021/22 financial year

HAYNE ROYAL COMMISSION RESPONSES

– A new independent body, the Financial Regulator Assessment Authority, will be established to review and report on the effectiveness and capability of the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority

– Regulation to lower compliance costs

– New measures to prohibit the deduction of ongoing advice fees from MySuper products and to increase the transparency of fees to members

– Royal commission recommendation that individuals be ‘stapled’ to a single super account will start on November 1

OTHERS

– Automatic mutual recognition of occupational tradie and skilled worker licences comes into effect across NSW, Victoria, ACT and NT that allows workers – including plumbers, builders and architects – to operate across jurisdictions

– Extension of the Junior Minerals Exploration Incentive by four years to incentivise new investment in small minerals exploration companies undertaking greenfields minerals exploration in Australia

– Changes to the Franchising Code of Conduct, including a better balance of rights for franchisors and franchisees and improve access to justice though additional, more efficient dispute resolution processes

– Improving payment times for suppliers in government contract supply chains. Large businesses with contracts valued above $4 million required to pay their suppliers with subcontracts of up to $1 million within 20 calendar days, or pay interest

– Further rollout of Open Banking that will allow more Australians to be able to securely access and share their banking data to access better value products and services

– Providers of debt management services will be required to hold an Australian credit licence and meet ongoing obligations imposed on licensees.

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