...stating that now every app must have a privacy policy.
What does this new mandatory change mean for developers? Do we have to aquire formal legal documents from lawyers or is a simple write up such as "xyz/nothing is being collected" enough ?
Secondly what if you create an app that does not collect any data at all, is a privacy policy still necessary ?
Yes, you must have a Privacy Policy, even if all it says is:
FizzBuzz(TM) does not collect any data.
You do not generally need a lawyer (says the non-laywer) to write a Privacy Policy, as long as your PP is accurate about what it collects (or doesn't collect). If your PP is inaccurate Google will blacklist your app, at least until you can convince a living Google employee that your PP has been sufficiently updated.