What policy changes might affect your business?

Simple Strategies Newsletter | April 2024

Here are some of the changes businesses should watch for:

1. Reintroduction of 90-day employment trial periods

The government has extended the availability of 90-day employment trial periods for all businesses, reversing changes made in 2018, which scrapped 90-day trials for businesses with more than 20 employees.

2. Fair Pay Agreements cancelled

The Fair Pay Agreements Bill has been repealed. Collective agreements can still be negotiated by unions through collective bargaining, however with the repeal of the Fair Payments Agreements Bill, any person or organisation that obtained personal information for the purpose of Fair Pay Agreement bargaining must now dispose of that information in line with the Privacy Act 2020.

3. Fuel tax changes

The Auckland Regional Fuel Tax, adding 11.5 cents to every litre of petrol sold in the city, will end on 30 June 2024. National has also cancelled the previous Government’s planned fuel tax increases that would have added a further 12 cents to the litre. However, the gradual price increase will be replaced in the first year of the next term of Parliament when fuel taxes will rise by 12 cents in one go. After this hike in January 2027, fuel taxes will increase by 6 cents a litre in 2028 and four cents a litre each year after that, meaning by the end of the next term, the Government will have raised fuel taxes by 22 cents a litre. An equivalent increase in road user charges will also occur.

Vehicle registrations will also jump by $50.

4. Minimum Wage Changes 

The government has announced an increase to the minimum wage that kicks in from April 1. The adult minimum wage will rise by $0.45 an hour, taking it up to $23.15 an hour. Starting-out rates and the training wage continue to be at 80% of the minimum wage, $18.52 per hour.

Employers who pay their employees by the day, week, or fortnight need to make sure workers are paid at least the minimum wage appropriate to the basis on which they are paid. Time over an 8-hour day, or 40-hour week or 80-hour fortnight (as applicable) must be paid at least $23.15 per hour.

5. Interest Deductibility Changes

As of 10 March, the coalition government has confirmed the return of interest deductibility for property investors, with the phased-in changes taking effect from the next financial year.

As a result, legislation is expected to be passed allowing you to deduct 80% of your interest expenses on property investments in the year to 31 March 2025 (ie from 1 April 2024). Note that the previously proposed 60% allowance for the current year has been removed, the existing 50% allowance will remain for the current 2023-24 year.

6. Rural regulations set to go

National and Act have committed to reducing regulation and red tape in the farming sector, though it’s not certain yet what that looks like.

We’ll keep you posted.

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