Support for small business franchisees
The Government will provide $7.1 million over two years from 2025–2026 for the Australian Competition and Consumer Commission (ACCC) to strengthen regulatory oversight of the Franchising Code of Conduct and ensure a more transparent and effective regulatory framework for the franchising sector.
The Government will also provide $0.8 million in 2025–2026 for Treasury, working with states and territories, to develop and consult on options to extend protections against unfair trading practices to small businesses and protect businesses regulated by the Franchising Code of Conduct from unfair contract terms and unfair trading practices.
Employment contract non-compete clauses to be abolished
The Government will ban non-compete clauses for more than three million Australian workers in industries including childcare, construction and hairdressing. This has been spurred by the Treasury’s Competition Review which heard troubling accounts regarding the misuse of non-compete clauses, including minimum wage workers being sued by former employers.
The ban on non-compete clauses will apply to workers earning less than the high-income threshold in the Fair Work Act 2009 (currently $175,000). The Government will also close loopholes in competition law that currently allow businesses to:
- fix wages by making anti-competitive arrangements that cap workers’ pay and conditions, without the knowledge and agreement of affected workers; and
- use “no-poach”‘ agreements to block staff from being hired by competitors.
The Government will consult on policy details, including exemptions, penalties, and transition arrangements. Following consultation and passage of legislation, the reforms will take effect from 2027, operating prospectively to give businesses and workers time to adjust.
Foreign ownership of housing: ATO to enforce ban
The ATO will be provided $5.7 million over four years from 2025–2026 to enforce the ban on foreign residents from purchasing established properties. In addition, the ATO and Treasury will be provided with $8.9 million over four years from 2025–2026 and $1.9 million per year ongoing from 2029–2030 to implement an audit program and enhance their compliance approach to target land banking by foreign investors.
The Government has already announced the ban on foreign persons (including temporary residents and foreign-owned companies) from purchasing established dwellings for two years from 1 April 2025, unless an exception applies. Exceptions to the ban will include investments that significantly increase housing supply or support the availability of housing on a commercial scale, and purchases by foreign-owned companies to provide housing for workers in certain circumstances.
The land banking measures are designed to ensure “foreign investors comply with requirements to put vacant land to use for residential and commercial developments within reasonable timeframes”. Land banking refers to the practice of entities purchasing land and holding it until such time as its value has increased and then selling (ie with no development or use of the land).
ATO enforcement of taxpayer compliance: increased funding
In now what is a standard feature of Budgets in recent years, the ATO is to receive yet another significant increase in funding to enforce taxpayer compliance. Specifically, the Government will provide $999.0 million over 4 years for the ATO “to extend and expand tax compliance activities”.
The additional funding includes the following.
- $717.8 million over four years from 1 July 2025 for a two-year expansion and a one-year extension of the Tax Avoidance Taskforce. This focuses on multinationals and other large taxpayers.
- $155.5 million over four years from 1 July 2025 to extend and expand the Shadow Economy Compliance Program to reduce shadow economy behaviour such as worker exploitation, under-reporting of taxable income, illicit tobacco and other shadow economy activity that enables non-compliant businesses to undercut competition.
- $75.7 million over four years from 1 July 2025 to extend and expand the Personal Income Tax Compliance Program. This will enable the ATO to continue to deliver a combination of proactive, preventative and corrective activities in key areas of non-compliance.
- $50.0 million over three years from 1 July 2026 to extend the Tax Integrity Program. This will enable the ATO to continue its engagement program to ensure timely payment of tax and superannuation liabilities by medium and large businesses and wealthy groups.
The anticipated return on this investment is also noteworthy – it is estimated to increase receipts by $3.2 billion over five years from 2024–2025, and increase payments by $1.4 billion, including an increase in GST payments to the states and territories of $402.6 million and $31.0 million in unpaid superannuation (to be disbursed to employees).