All the changes coming from July 1

IT’S nearly the start of the new financial year, which means, as always, a raft of important changes. Here’s what you should know.

IT’S nearly the start of the new financial year, which means, as always, a raft of changes.

From fees and charges to superannuation, here’s how the world will be different starting from July 1, 2017.

POWER PRICES SKYROCKET

Power prices are once again set to skyrocket in NSW, Queensland, South Australia from July 1, with AGL, Origin and EnergyAustralia all announcing big increases of up to 20 per cent following the annual review of prices by the energy regulator.

Combined electricity and gas bills for AGL customers in the ACT will increase by an average of $580, following a 19 per cent and 17 per cent increase, respectively, while NSW households can expect to pay up to $400 a year more.

Customers in South Australia, which already has the nation’s most expensive power, will pay an extra $350 to $390 a year. In Queensland, price increases will be less severe, with residential customers expected to pay about $130 a year more.

NETFLIX TAX KICKS IN

Customers of streaming services such as Netflix can expect to pay more from July 1 when the government’s so-called “Netflix tax” comes into effect. The 10 per cent levy on international suppliers of digital products and services is designed to even the playing field for local businesses.

GOODBYE, GREEN CARD

Travellers leaving Australia from Saturday will no longer have to fill out that annoying green outgoing passenger card, thanks to changes pushed through parliament in May.

“The Australian government is focused on low-contact automated border clearance technologies to manage the 50 million travellers expected annually by 2020,” the ABS said in a statement earlier this year.

“Removing paper-based passenger cards is integral to achieving a seamless and automated traveller experience. DIBP has worked closely with the ABS and Tourism Research Australia to identify and successfully test alternate data sources to the OPC. Changes to use these alternative sources are now well under way to remove reliance on the paper OPC.”

Unfortunately, the incoming passenger card remains — for now.

SUPERANNUATION CHANGES

The biggest changes to Australia’s superannuation system in years kick in from July 1, affecting super contributions and the way super and retirement income are taxed for everyone from low-income earners to wealthy retirees.

Workers earning less than $40,000 will be able to claim a new tax offset of up at $540 a year, while high-income earners earning more than $250,000 may have to pay extra tax on contributions.

Retirees earning tax-free income payments from an account-based super pension will also be hit with a new limit on how much super they can transfer into the account. Called the “transfer balance cap”, the limit will initially be set at $1.6 million.

PAY PACKETS INCREASING

The national minimum wage is set to increase by 3.3 per cent from July 1, giving 2.3 million of Australia’s lowest-paid workers their biggest pay rise in six years. The increase of 59 cents per hour to $18.29 — or $22.20 per week to $694.90 — angered both unions and business groups.

The ACTU called for double the increase approved by the Fair Work Commission, while business groups wanted half. “The minimum wage will now be just over $36,000 a year,” ACTU secretary Sally McManus said earlier this month. “That’s not enough to support yourself, let alone a partner and a family anywhere in Australia.”

She added that 700,000 workers in retail and hospitality would effectively not receive the pay increase due to penalty rate cuts from July 1. Fast food, hospitality, retail and pharmacy workers will have their Sunday penalty rates cut by five percentage points, with deeper cuts over the next three years.

Australia Retailers Association executive director Russell Zimmerman described the increase as “devastating”, saying almost half of the penalty rate cuts had now been eaten up by the minimum wage increase.

“It virtually negated [the penalty rates] decision and I think it will be a long time unfortunately before you see retailers really start to think about putting more people on,” he said.

BULK BILLING INCENTIVES

Patients are more likely to be bulk billed from Saturday, after the federal government partially unfroze the Medicare rebate to index bulk billing incentives to inflation in last month’s budget, giving doctors a slight pay rise. The rebate for standard doctor visits won’t be unfrozen until next July, however, and specialists will have to wait until 2019.

“The AMA would have preferred to see the Medicare freeze lifted across the board from 1 July 2017, but we acknowledge that the three-stage process will provide GPs and other specialists with certainty and security about their practices, and will help address rising out-of-pocket costs for patients,” Australian Medical Association president Michael Gannon said last month.

The price of some medicines including contraceptive pills and EpiPens could also become cheaper as a result of a deal with pharmaceutical companies, which will see the government pay less for subsidised medicines in exchange for longer-term funding certainty.

FIRST HOME BUYERS

A number of changes are coming for first homebuyers from July 1, including changes to state-based first homeowner grant schemes and stamp duty reduction. In Victoria, the grant for first homebuyers in regional areas will be doubled to $20,000 for new homes valued up to $750,000.

In Tasmania, the grant will halve from $20,000 to $10,000 for new homes and off-the-plan properties. In Queensland, the grant was set to be reduced from $20,000 to $15,000, but the state government earlier this month announced an extension until December 31.

Stamp duty will be abolished for first homebuyers in Victoria for purchases of new or existing properties up to $600,000, while stamp duty will apply on a sliding scale for properties valued between $600,000 and $750,000. Similarly in NSW, stamp duty will be abolished for first home buyers of new and existing properties up to $650,000, while discounts will apply on properties up to $800,000.

SUPER SAVER SCHEME

From July 1, savers will be able to salary sacrifice extra into their superannuation account above the compulsory contribution, up to a maximum of $30,000 in total and $15,000 in a single year. They will then be able to withdraw that cash from July 1, 2018 onwards, along with any associated earnings, to go towards a home deposit.

Treasurer Scott Morrison said “First Home Super Saver Scheme”, announced in last month’s Federal Budget, would boost first homebuyers’ savings by up to 30 per cent compared with a standard saver account, but experts have questioned that figure, saying the average person would only save about $2500 extra a year.

PROPERTY INVESTORS SLUGGED

A number of state and federal changes affecting foreign and local property investors will kick in from Saturday. In NSW, the Foreign Investor Surcharge Duty will be doubled from 4 per cent to 8 per cent from July 1, while the annual land tax surcharge on foreign buyers will rise from 0.75 per cent to two per cent a year.

In Victoria, the stamp duty changes aimed at helping first homebuyers will also negatively impact investors. From July 1, the off-the-plan stamp duty concession will only be available to purchasers who intend to live in the property, meaning local investors, foreign investors and other non-residential property purchasers will be worse off.

[e-mail]