Budget’s ban on non-competes ‘no cause for alarm’ in adland

The federal government is planning to ban non-compete clauses for employees who earn less than $175,000 a year, in a change that could free up three million Australians. Experts say the move will have minimal impact on the advertising and marketing industry because junior and mid-level employees are not generally subject to non-competes.

The policy was announced in Tuesday night’s budget, and is planned to come into effect from 2027. Non-compete clauses are designed to stop valuable employees from moving to a competitor or setting up a competing business, but the government claims they are often weaponised against low-earners to scare them into remaining at a company.

The treasurer, Jim Chalmers, said non-compete clauses are “holding too many Australian workers back from going to better-paid opportunities or setting up small businesses” and that “Australians shouldn’t need a lawyer to go to a higher-paying job.”