As we step into the new financial year, it’s crucial for small business owners in Australia to be aware of the legal and compliance changes that have come into effect. These changes span across various aspects of business operations, including wages, superannuation, asset depreciation, energy bills, migration, and more. Here’s a rundown of the 15 key changes in Australia and how they might impact your business.
1.Minimum wage increase:
The Fair Work Commission has announced a 5.75% increase in the national minimum wage, effective from the first full pay period on or after 1 July 2023. This means the new national minimum wage is $882.80 per week, or $23.23 per hour. This increase applies to all employees who get their pay rates from the national minimum wage, a modern award, or in some cases, a registered agreement.
2. Superannuation guarantee rate:
The superannuation guarantee rate has increased from 10.5% to 11% from 1 July 2023. This means employers will need to contribute 10.5% of their employees’ ordinary time earnings to superannuation. This change is part of a gradual increase in the superannuation guarantee rate to 12% by 2025.
3. Changes to asset depreciation rules:
The Temporary Full Expensing incentive, which allowed businesses to immediately deduct the cost of new assets from their taxable income, concluded on 30 June 2023.
For the new financial year, small businesses with an aggregated turnover of less than $10 million will be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2024. The $20,000 threshold will apply on a per-asset basis, allowing small businesses to instantly write off multiple assets.
Assets valued at $20,000 or more, which cannot be immediately deducted, can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year after that.
4. Energy bill relief:
The Australian Government has introduced the Energy Bill Relief Fund for small businesses. This fund provides financial support to small businesses to help them manage their energy costs.
5. Migration changes:
The Temporary Skilled Migration Income Threshold (TSMIT) has been raised to $70,000. This means that businesses sponsoring overseas workers on a Temporary Skill Shortage visa will need to ensure these employees are paid at least this amount.
6. Cap on international worker hours:
The Australian Government has temporarily relaxed the working hours cap for student visa holders. This means international students cannot work more than 48 hours per fortnight in certain sectors.
7. Unfair dismissal high-income threshold:
The high-income threshold for unfair dismissal claims has increased to $167,500. This means that employees who earn more than this amount and are not covered by a modern award or enterprise agreement cannot make an unfair dismissal claim.
8. Parental leave:
The Paid Parental Leave scheme has been updated to provide an additional two weeks of ‘Dad and Partner Pay’, for children born or adopted on or after 1 July 2023.
9. Sharing Economy Reporting Regime:
The Australian Taxation Office (ATO) has introduced a new reporting regime for the sharing economy. This regime requires sharing economy platforms to report income earned by their users to the ATO.
10. Penalty Unit Increase
The value of one penalty unit for breaches of Australian Government laws has increased to $313 for offenses committed on or after 1 July 2023.
11. Business name and company name registration fees:
The Australian Securities and Investments Commission (ASIC) has increased its fees for some forms, including business name registration and renewal, and company registration.
| Company Fees From 1 July 2023 | |
|---|---|
| Application for registration as an Australian Company | $576 |
| Reserving a company name | $59 |
| Late payment fee for up to one month late | $93 |
| Late payment fee for more than one month late | $387 |
| Application for voluntary deregistration of a company | $47 |
| Annual review fee for a proprietary company | $310 |
| Annual review fee for a registered scheme or a public company | $1,440 |
| Business Name Fees From 1 July 2023 | |
|---|---|
| Registration or renewal for one year | $42 |
| Registration or renewal for three years | $98 |
12. Small claims procedure:
The monetary cap for recovering small claims has increased to $100,000 on 1 July 2023.
13. ACT plastics ban:
The ACT Government has expanded its single-use plastics ban from 1 July 2023. The new bans include single-use plastic plates and bowls, expanded polystyrene loose fill packaging and trays, and plastic micro beads in rinse-off personal care and cleaning products. From 1 January 2024, the ban will also cover heavyweight and boutique plastic bags.
14. Child employment laws in Victoria:
New child employment laws have come into effect in Victoria, with stronger penalties and a simpler licensing system to ensure the safety of children under 15 in the workplace.
15. WorkCover premiums in Victoria:
The Victorian government is making significant changes to the WorkCover Scheme to increase revenue and reduce costs
- Premium rate increase: Effective from July 1, 2023, the premium rate will increase from 1.272% of payroll (where it has been since 2014) to 1.8% in 2023-24, marking a 41% increase.
- Premium cap increase: The premium cap will rise from 30% to 75%. This means that a premium, regardless of the claims costs for an individual employer, could not increase more than 75% per year. This could potentially take a $100,000 premium to over $500,000 in three years.
- Exclusion of certain claims: The government is proposing to exclude claims from employees suffering from stress and burnout. Instead, these employees will be encouraged to return to work and will be eligible for provisional payments for up to 13 weeks to cover medical treatment costs. What happens after 13 weeks remains unclear.
- Creation of ‘Return to Work Victoria’: A new entity, ‘Return to Work Victoria’, will be created after seeking input from unions, employers, and the medical profession. This is expected to result in less time off work, lower WorkCover claim costs, and less impact on premiums.
