With 12 major changes slated to come into effect for Australian businesses in line with the new financial year, businesses are being urged to educate themselves on the new responsibilities and requirements they must uphold in line with the new legislations.
With the standardisation of Payday Super for all employers, reintroduction of loss carry back rules, increase in the absence period on paid parental leave, permanent extension of instant asset write-off, expanded Anti-Money Laundering and Counter Terrorism Financing requirements, and the National Minimum Wage to increase all from July 1, RSM Australia’s National Head of Business Advisory Jason Croker says businesses must equip themselves with an awareness of the new standards they will be upheld to.
“The suite of changes in store for Australian businesses should not come as a reason for concern for business owners, just a reminder to brush up on their legal responsibilities, both existing and upcoming,” Mr Croker said.
“From 1 July, businesses will need to heed changes to the minimum wage which will impact a whole host of industries. Though we have seen many businesses paying above the minimum wage in years previous to address the shortage of skilled labour, employers must still review the relevant award to ensure pay is in line with the legislation.
“Naturally, the rise in wages will add to the general increase in business running costs in an environment where it is difficult to pass on to customers – couple this with margin squeeze, and we do expect the results to be inflationary.
“The simultaneous implementation of a National Minimum Wage rise and the commencement of Payday Super will be a pressure point for Australian businesses, particularly small businesses. Businesses must ensure that their systems and processes are ready for these changes and to withstand the Cashflow impacts of paying Superannuation at the same time as wages.”
Another change will see paid parental leave increase to 26 weeks, meaning businesses will need to manage longer periods of employee leave.
RSM’s Jason Croker says for many businesses, no adjustment period will be necessary for this legislation.
“In the modern employment market this is largely expected, and part of many employer arrangements already – this is more a case of legislation catching up with the norms of private enterprise.”
“Though many businesses seem to be equipped to financially sustain longer leave periods, the formalisation of this legislation does invite consideration that these circumstances of leave periods can be difficult for businesses to plan around – we often recommend considering an internal secondment or job-sharing arrangement to cover the leave period.”
Mitchell Anderson, RSM Australia Senior Manager – Business Advisory says the reintroduction of the loss carry back tax regime set to come back into effect 1 July 2026 will require a careful trade-off assessment.
“This measure provides a cashflow lever, enabling companies to generate an immediate tax refund by offsetting current year losses against prior year taxed profits. This is best used where prior tax has been paid and cash is a priority – it is particularly valuable for businesses coming off profitable years into a downturn,” Mr Anderson said.
“Companies will need to weigh the upfront refund against the potential value of carrying losses forward to offset future profits, and particular consideration and planning will be needed for companies that already claim R&D tax offsets, given the interaction between the two regimes and the impact on franking account balances.
“In short, the loss carry back tax offsets will be best used to support reinvestment and growth, rather than funding distributions to directors or shareholders.”
RSM Australia’s National Head of Restructuring & Recovery Jerome Mohen forecasts that the impending cash flow pressures expected in line with the changes will compound the increased insolvency rates experienced last financial year to see further insolvencies in FY26-27 businesses experiencing acute cashflow troubles.
“On the backdrop of increasing ATO debt, low consumer confidence and high interest rates, we do unfortunately expect to see insolvencies on the incline again in the coming financial year,” Mr Mohen said.
“Inflation is still not within the desired bands and the natural result of that is that there will be further business failures, especially in areas where the company can’t pass on rising costs to the consumer – what we’ve learnt in the last 12 months is that business challenges are not sector agnostic.
“We’ve seen the ATO take a much harder approach to their approval of Small Business Restructure proposals, general interest charge remittance requests and payment plan requests meaning early and qualified professional advice is even more critical as alternate restructuring or recapitalisation mechanisms may need to be considered because of this.
“The changes in line with the new legislation coming in from July 1 appear to be well understood at an advisor level but not to the same extent in the SME community.
“We are urging members of the SME community to understand the implications of the changes – particularly the Payday Super changes – because they are the ones who are going to have to face the consequences and potential personal liability should these new requirements be breached.”
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