Don't see any confliction between the regs there Swanie. Pilots must climb to at least 500' before turning. In addition, remaining in the circuit should climb to within 300' of circuit height.
So just climb to 700', (or 1200 if you have a d/wind speed >120kts) and turn crosswind. No rules broken, standard procedures complied with, and all is well in the world.
In my experience much of the confusion about this comes from people who have learnt to fly at a Controlled Aerodrome, where the crosswind turn IS made at 500' AGL, and then don't know the regs for Class G, and just assume it's the same.