July 1 changes: The new banking and energy reforms Australians need to know about
It’s hard to believe, but just like that we’re already halfway through 2019 and at the start of a brand new financial year! But why should Australians give a hoot about July 1?
Well July 1 marks the starting date of a heap of changes which could affect everything from the fees you pay on your bank account, the price you pay for your energy plan, and even the cost of running your small business.
Here are some of the July 1, 2019 changes you’ll want to know about:
Despite issuing a final report back in February, the Banking Royal Commission is still having an impact, with a new Banking Code of Practice kicking in yesterday.
The code, which a number of Australia’s largest banks have signed up to, will ensure that customers are made more aware of no fee or lower fee bank and savings accounts and alerted before any introductory credit card balance transfer offers expire among other changes.
And in what could prove a huge boon for customers and emerging financial providers, July 1 also marks the start of a new era of open banking in Australia.
Open banking will make it easier for Australians to allow their financial data to be shared between different banks and financial providers, potentially giving them a greater overview of their finances and the transparency which could help them shift providers to get a better deal.
From today Australia’s big four banks, ANZ, Commonwealth Bank, NAB and Westpac, will be required to make deposit, transaction and credit card account information available if it’s requested by a customer. This will also apply to home loan data from February 2020.
The same will be also be required of smaller banks from July 1, 2021.
“Data is driving change and transformation across all sectors of our economy, and this will only accelerate. Realising the benefits of open banking will depend on the level of confidence that customers have in the platform, and the readiness of businesses to grasp the opportunities it creates,” said Westpac’s Chief Data and Strategy Officer, Jamie Twiss.
“We are very supportive of the regime and see it as an exciting opportunity to give our customers more choice and delight them with better banking experiences.”
Household energy bills
As is the norm at the start of each financial year, energy prices will change, but new this year is the introduction of the default market offer (DMO) for electricity in New South Wales, South-East Queensland and South Australia.
This offer is the maximum rate electricity retailers can charge in each respective market and are designed to ensure that Aussie households don’t end up paying more than they need to on their energy bills. Keep up to date with the latest market offers in your state with our updated price table.
The new financial year also brings with it a number of changes to the way energy retailers can operate, thanks to new a new code mandated by the ACCC (Australian Competition and Consumer Commission).
As well as placing a cap on standing electricity offers in the states listed above, the ACCC has banned conditional headline discounts in an effort to make the process of comparing energy offers more transparent.
And in good news for Victorians, from July 1 households will be able to save hundreds of dollars on their electricity bills thanks to the introduction of the new Victorian default offer.
“This is one of the biggest reforms to the energy sector in over a decade – and it’s not just available to people currently on standing offers; anyone can ask for the Victorian default offer,” said Victorian Energy Minister, Lily D’Ambrosio, at the time of the announcement.
Unless you’ve been living under a rock you’ll probably have noticed the swathe of home loan rate changes over the past month since the Reserve Bank cut interest rates.
And while there could be even more rate drops to come if the RBA decides to go back-to-back and drop rates at tomorrow’s meeting, the major change in the world of property yesterday was to stamp duty in New South Wales.
Unfortunately for buyers the New South Wales government hasn’t abolished stamp duty, but it is the first state in Australia to index stamp duty to inflation in an attempt to curb the ‘bracket creep’ which has hiked up the average rate of stamp duty in recent years.
Aside from the new Banking Code of Conduct reforms which are set to make taking out a small business loan more simple, small businesses can now take advantage of a higher threshold for small business asset write offs from July 1.
Previously businesses with a turnover of between $10 million and $50 million were able to instantly write off an asset or assets such as printer or new vehicle up to a value of $25,000, but that figure has now been increased to $30,000.