Treasurer Jim Chalmers has handed down a pre-election Federal Budget with a range of headline measures aimed at easing cost-of-living pressures, boosting housing supply, and addressing workforce shortages.
But what does it actually mean for building and construction businesses?
We’ve gone through the announcements and are looking beyond the headlines to unpack the real impact for the construction sector – from housing and workforce incentives to tax and compliance changes.
The government will inject an additional $800 million into the Help to Buy scheme, increasing access by lifting income caps to $100,000 for singles and $160,000 for couples or single parents. Property price caps have also been lifted – up to $1.3 million in Sydney and $1 million in Brisbane. Under the scheme, the government contributes up to 40% for new homes and 30% for existing homes.
The expansion of this initiative is welcome news for the sector, but it’s worth noting that the beneficiaries of this stimulus will likely be larger volume builders who operate in the affordable end of the market.
The government has allocated $54 million, with $49.3 million to support state and territory programs and $4.7 million to develop a national certification process for offsite construction.
While prefabricated and modular housing could absolutely be part of the long-term solution, this funding feels more like a headline than a serious attempt to solve one of the biggest challenges in the economy. The federal target is to build 1.2 million homes by 2029, but the current projections from the states fall well short.
For example:
Compared to the national target, these state contributions are a drop in the ocean. Without significantly more investment, coordination, and planning reform, prefab won’t bridge the housing supply gap on its own.
A two-year ban on foreign buyers purchasing existing residential homes will take effect from 1 April 2025.
This measure is aimed at easing pressure on housing availability, but it’s unlikely to move the dial on housing supply or directly benefit builders. The ban applies only to established homes, so any shift in demand towards new builds will likely be marginal.
One of the most disappointing omissions in this year’s Budget is the decision not to extend the $20,000 instant asset write-off.
This incentive has been popular among small businesses in recent years, allowing immediate deduction of assets up to $20,000 rather than depreciating them over time. As it stands, the current scheme will end on 30 June 2025, and the threshold will revert to just $1,000 from 1 July 2025.
For builders and tradies, this is a real letdown. A $20,000 cap doesn’t go far – you can’t buy much for a construction business these days, especially when it comes to vehicles or major equipment. A more effective measure would have been lifting the cap to $50,000, which would deliver a much more meaningful productivity boost.
Industry groups including the Australian Chamber of Commerce and Industry and the Australian Industry Group have described the omission as a “kick in the teeth” and called for the measure to be legislated permanently.
Incentive payments for apprentices in the housing sector have been doubled to $10,000, and employers hiring eligible apprentices can now receive up to $5,000 through a new Priority Hiring Incentive. These measures build on and enhance the existing Australian Apprenticeship Incentive System.
Labour shortages remain one of the biggest issues in town – regularly flagged as a key constraint on housing delivery and broader construction activity. While these incentives are a positive step, they could arguably go further.
During COVID, the government provided wage subsidies of up to $28,000 per apprentice – far more than what’s on the table now. And while the pandemic has passed, the supply chain issues and workforce shortfalls certainly haven’t. There’s a strong case for ramping up support again if we’re serious about solving the housing crisis.
It’s also important to recognise that boosting apprentice numbers is only part of the equation. Completion rates remain stubbornly low, with many apprentices not finishing their training. That means the impact of any incentive will be limited unless we also invest in the systems that support apprentice progression – structured training, mentoring, and on-the-job support.
From 2027, non-compete clauses will be banned for workers earning under $175,000 per year.
This is of particular concern in industries like construction, where many builders and tradies know firsthand how hard it is to invest in developing a team member – only to see them switch to a competitor or go out on their own and start competing directly.
While the aim is to increase mobility and improve wages, there needs to be a more balanced approach than scrapping these restrictions entirely. For small and growing firms especially, this could impact their ability to retain skilled staff and protect hard-won client relationships.
From 1 July 2026, the tax rate for income between $18,201 and $45,000 will drop from 16% to 15%, and again to 14% in 2027.
This offers a minor boost to take-home pay, but on its own, it’s unlikely to materially change behaviour or market conditions.
The Budget includes an agreement between the Commonwealth and state and territory governments to design a national licensing scheme for electrical trades.
This is a significant step toward solving cross-border labour constraints – particularly for commercial and multi-site operators who currently face delays and red tape moving electricians between states.
If implemented, it would allow licensed electricians to work nationally without needing to reapply or retrain in each state. For businesses operating across state lines or in regional areas, this reform could reduce project delays and make it easier to deploy skilled labour where it’s most needed.
While no firm rollout date has been confirmed, funding has been committed to support the design phase of the scheme – and it’s been welcomed by industry as a long-overdue reform.
There’s a lot in this Budget – and not all of it is easy to apply to your own business situation.
If you’re unsure how any of these measures impact your financials, your structure, or your growth plans, we can help you make sense of it.
Book a consultation with our team to talk through the detail and work out what to do next.
