What’s changing in July: Penalty rates to drop, childcare subsidies

Penalty rates in some industries will drop on Sunday while changes to childcare subsidies will come into effect a day later.

Some families will get extra money back from childcare changes, while others will have their penalty rates slashed.

Some families will get extra money back from childcare changes, while others will have their penalty rates slashed. Source: AAP

Some families will lose their weekend penalty rates on Sunday but might get extra money back in their pocket from childcare changes the next day.

And anyone buying a product from overseas will have to pay GST on it if it's worth less than $1000.

The changes are among a raft of new budget measures and policies to come into effect around the country on Sunday.



The new hourly minimum wage goes up 64 cents an hour, but Sunday and public holiday penalty rates for workers in the fast-food, retail, hospitality and pharmacy sectors will drop 10 to 15 per cent.

Childcare subsidies are changing on Monday to a means-tested and activity-tested payment, meaning both parents must be working, studying, volunteering or searching for work at least eight hours a fortnight to be eligible.

Under the new rules, families earning less than $187,000 a year will have an uncapped limit on the childcare subsidy, which used to sit at $7613.

"Child care costs shouldn't be a barrier to work like it has been for thousands of families with the dreaded annual rebate cap," Education Minister Simon Birmingham said.

But Labor leader Bill Shorten says the government is making Australia a less fair place from next month.

mother and child
Some families will get extra money back from childcare changes to come into effect on Monday. (AAP)


"On the 1st of July there are new cuts to child care, which hurts families. New cuts to family payments, which hurts families," Mr Shorten said.

"New cuts to Sunday penalty rates, which hurts families. And this is on top of the Medicare freeze, which hurts families."

Tax cuts will also come into effect on Sunday, lifting the 32.5 per cent income tax threshold from $87,000 a year to $90,000.

People earning up to that threshold will also be eligible for a tax offset worth up to $530, but it won't be paid until tax returns are processed in 2019.

The lower corporate tax rate for businesses with turnovers between $10 million and $50 million will apply from the new financial year.

Labor has promised to keep the new 27.5 per cent rate for those companies, but is pledging to repeal a further cut to 25 per cent in 2026/27.


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