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ARTICLE · 01 APRIL 2025

Federal Budget 2025: Labor's plan to abolish non-compete clauses and empower workers

Mellor Olsson
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What are non-compete clauses? What will this mean for employers?

AustraliaEmployment and HR
John Love
John Love
Ben Smith
Ben Smith
Matilda Wise
Matilda Wise
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Tuesday's Federal Budget foreshadowed significant changes for employees with non-compete clauses in their employment contracts.

The Albanese government has pledged to prohibit non-compete clauses for employees who earn less than the high-income threshold (currently $175,000) by 2027.

This change will affect over three million Australian employees.

The aim of this initiative is to support employees by eliminating obstacles that hinder them from launching their own businesses or pursuing better-paying opportunities. The Treasurer, Jim Chalmers, revealed the changes will increase annual wages by up to $2,500 for employees on median to low wages and will boost GDP by as much as $5 billion. The changes could also improve productivity and reduce inflation.

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