For most people 1 July is just the start of a new financial year. This year it is shaping up as the day a stack of cost and cash flow hits all land on business at once, right when they can least absorb them.
📅 The fuel excise cut expires on 30 June, adding around 26 cents per litre back at the pump from 1 July
📅 The three-month suspension of the heavy vehicle road user charge also ends, pushing transport costs up again
📅 Award and minimum wages rise 4.75%, flowing through from the first full pay period on or after 1 July
📅 Payday super begins, so super must reach employee funds within 7 business days of every payday rather than quarterly
📅 The ATO's free Small Business Superannuation Clearing House closes on the same day, forcing a switch to new systems
Any one of these on its own is manageable. The problem is that they land together, on the same payroll cycle, and they hit different parts of the business. Fuel is a price shock. The wage rise is a cost shock. Payday super is a cash flow shock. Stack them on top of each other and you get a step change in both the cost base and the working capital a business needs to carry. It is worth remembering too that the 4.75% wage rise is not just 4.75%. Super, payroll tax, and workers comp all scale up with it, so the true increase in labour costs is higher than the headline.
Payday super is the one that does lasting damage. Until now businesses have effectively held employee super as a free float, paying it quarterly up to 28 days after the end of the quarter. From 1 July that float disappears and super goes out the door with every pay run. For a business paying weekly that is a permanent tightening of working capital. It is a one-off hit to cash that never comes back, and it lands at the exact moment wages step up and fuel jumps.
And it all arrives into the weakest trading environment we have seen in years. Consumer confidence is near record lows, discretionary spending is falling, and the Hormuz crisis is still feeding through the supply chain. Businesses are being asked to wear higher costs at the very point they have the least ability to pass them on. The one piece of relief is electricity, with DMO prices falling for small businesses from 1 July, but that is regionally limited and nowhere near enough to offset the rest.
For a marginal business, this is exactly the kind of confluence that tips it over. If you run an SME, model the combined hit now, not each piece in isolation. Look hard at what your cash position looks like in the first full week of July, with super going out on every pay run, a higher wage bill, and diesel back above $3. If the numbers do not work, the time to get advice is now, while you still have options on the table.