New budget measures plan to bring in a prohibition on non-compete restrictions for employees earning less than AUD175,000

At a glance

• Ahead of the upcoming Federal election on 3 May 2025, the government has delivered its 2025-2026 budget.
• In connection with delivering the budget, the government has committed to banning non-compete restrictions for employees earning less than AUD175,000, with effect from 2027, if re-elected.
• It is not yet clear whether the prohibition will extend beyond non-competes to clauses such as non-solicits and non-poaching etc in employment contracts. However, the government has announced that it will prohibit 'no-poach' agreements between businesses, where businesses agree not to hire workers in certain other businesses.
• Further details are awaited but progress on this new measure is likely to rest on the outcome of the May election.  If the existing government does not retain power, the ban may ultimately not take effect.  Employers will need to keep a watching brief.