NON-COMPETE BAN CONCERNS VMA

Peak industry employers’ group, the Visual Media Association, has described the proposed banning of non-compete clauses outlined in the federal budget as “concerning".

Saying the budget offered “little to nothing” to assist print, Charles Watson, general manager – IR, Policy and Governance, at VMA, said the budget, “does nothing to incentivise a basically flatlining economy to push national productivity and growth”.

Watson said, “Given most of the measures in this year’s budget have already been announced, last night offered few new announcements or real surprises. On balance, this budget does little to nothing to assist our industry, or the business community generally, other than the energy and construction sectors.”

On the controversial non-compete clause banning move, which treasurer Jim Chalmers said would unlock economic growth, Watson said, “The budget announcement on banning non-compete clauses in employment contracts for employees earning less than $175,000 per annum was concerning.

“The proposed ban is based on the government’s view that such contractual clauses suppress wages and competition, and their removal would unlock productivity and add up to $5bn to the GDP. Such a regulatory approach will be oppressive on businesses, particularly given the existing weight and history of related legal decisions that already educate businesses on what they can and cannot do in relation to restricting post-employment conduct.”

Leading into this year’s budget, VMA was seeking various measures from this budget, including a boost to the current $20,000 instant asset write-off scheme; more widespread efforts to tackle skills and worker shortages along with broader support for improved educational and training outcomes; business incentivisation measures; improvements to the taxation system challenges faced by business; and an appropriately articulated approach to national productivity.

Watson said, “Those issues were not actively addressed in this year’s budget. Frustratingly, the instant asset write-off scheme has not been extended beyond June this year, so will return to $1000 next financial year, unless new legislation is passed before the end of June by whoever forms government at the upcoming election.”

Looking at the broader economic picture, Watson said, “Unfortunately, but not unexpectedly, this budget confirmed a $27.6bn deficit for this financial year, and a forecast deficit of $42.1bn next year. Further, it is expected that federal budgets will now remain in the red for some years to come. This is a result of falling commodity prices, weak economic growth, and higher government spending on things like the NDIS, aged care, health and defence spending.” 

VMA has undertaken a review of the budget, and will be providing members with a detailed report, although Watson said, “It won’t cause the reader any great excitement”.