Consultation on reforms to non-compete clauses to boost wages and productivity

The Government is taking the next step in reforming non‑compete clauses that are holding back Australian workers from switching to better, higher‑paying jobs.

Today we are releasing a consultation paper to gather insights and feedback from workers, business and the broader community about how we ban non‑compete clauses to boost productivity and wages across the Australian economy.

Reforming non‑compete clauses is about encouraging aspiration, unlocking opportunity, lifting wages for working people, and making Australia’s economy more dynamic and competitive.

Right now, more than three million Australian workers are covered by these clauses, including childcare workers, construction workers, disability support workers and hairdressers.

Workers should not be handcuffed to their current job when there are better opportunities available for them and that’s what these reforms address.

Research suggests a ban on non‑competes could lift the wages of affected workers by up to four per cent, or about $2,500 per year for a worker on median wages.

Productivity Commission modelling suggests the changes could improve productivity and add $5 billion or 0.2 per cent to GDP annually, as well as reduce inflation.

The Government committed to consult on policy details to support these reforms and to seek views on whether further changes are required to other worker restraints and what these changes could look like.

The consultation paper also seeks views on complementary reforms to close loopholes in Australia’s competition laws that allow businesses to make anti‑competitive agreements that cap workers’ wages or block staff from being hired by competitors.

This important step is just one part of the government’s broad and ambitious competition agenda, including progressing a national licensing scheme for electrical trades people.

Both changes form part of a second tranche of reforms under the Government’s revitalised National Competition Policy.

They are part of the Albanese Government’s economic plan to help workers earn more and keep more of what they earn, and build a stronger and more productive economy.

The feedback we receive from this consultation will be used to inform legislation for these important reforms.

Submissions can be made online on the Treasury consultation hub until 5 September 2025.