A federal consultation closing 16 October asks whether Commonwealth funded construction work should come with minimum standards on conduct, payment, workforce and safety. No model has been chosen, but most states already use public work this way.
The Federal Government is asking a question that could change how the industry does business with the public sector.
Should access to Commonwealth funded construction work come with a set of minimum standards attached?
The Department of Employment and Workplace Relations is running the consultation now, with submissions closing on 16 October 2026. It is an early process. But the questions are broad, and the lever being examined is a powerful one.
The Commonwealth has not proposed a model yet
This is the point worth starting with.
The discussion paper states that decisions on the design, scope and implementation of any construction standards have not been taken. The government says it is not proposing a predetermined scope or model.
What it has done is set out the problems it wants to address and the questions it wants answered. Feedback from this round will inform any potential model. A second stage of consultation is then expected to test the design and implementation of whatever is put forward.
So nothing here applies to anyone today. What is on the table is a direction of travel.
Why government money is the lever being considered
The Federal Government announced its intention to consult on 1 May 2026. The stated aim is to make sure government financial arrangements drive quality, productivity, lawful behaviour and safe, secure, well paid jobs.
The scale of that money explains the interest. The discussion paper puts Commonwealth contracts for building construction and related maintenance and repair services reported on AusTender at around $16.4 billion in 2025/26. A further $13.5 billion is going to the states for infrastructure projects in 2026/27.
The Commonwealth does not run building licensing or most construction regulation. The states and local councils do. But the Commonwealth does decide the terms on which its own money is spent.
The paper lists the mechanisms in view. They include legislation or regulation, accreditation requirements, contract conditions, procurement frameworks, funding arrangements and agreements with the states.
The work sits under the National Construction Industry Forum, the tripartite body that brings together government, unions and employers. Its Blueprint for the Future, endorsed in September 2025, recognised that governments can do more to drive lawful behaviour, productivity and cultural reform.
What contractors could eventually be asked to demonstrate
The paper is built around five themes. Three of them describe the conduct any standards could target.
Integrity and lawful conduct. The questions cover bribes and inducements, the use of unofficial “industrial fixers” operating outside the Fair Work Act, whistleblower protections, and whether fit and proper requirements should apply to head contractors, subcontractors, labour hire providers and officials of union and employer organisations. Suggested criteria include serious contraventions, phoenix activity indicators and criminal convictions.
Productivity, fairness and industrial practices. The questions cover whether enterprise agreements are genuinely agreed, faster dispute resolution, stopping a bargaining representative from dictating subcontractor selection, and making sure subcontractors and suppliers are paid on time and in full without duplicating state security of payment laws.
Workforce development and job quality. The questions cover inappropriate use of labour hire, apprentice engagement and completion, flexibility that supports the participation of women, and mental health, fatigue and psychosocial safety.
The government has also ruled some things out. It states it has no intention of requiring employers to hold a union covered enterprise agreement as a condition of Commonwealth funding, or of preferencing those agreements in tenders. It also says it will not replicate Queensland’s former Best Practice Industry Conditions scheme.
Construction standards and the Charter: what is the difference?
Commonwealth construction standards, if adopted, would set minimum expectations backed by government oversight and enforcement, most likely through funding, procurement or legislative levers.
The Joint Construction Industry Charter is a separate draft document from the National Construction Industry Forum. It is industry led rather than government imposed, and is intended to set best practice expectations that sit above any minimum standards. Its draft is also out for feedback until 16 October 2026.
The Commonwealth has used this lever before
Attaching conditions to public money is not new in construction.
The Work Health and Safety Accreditation Scheme, run by the Office of the Federal Safety Commissioner, already applies to head contractors on certain Commonwealth funded building work. Under the model clauses published by the Department of Finance, it is triggered where a directly funded head contract is worth at least $4 million, or on indirectly funded projects where the Commonwealth contribution passes set thresholds.
Before that, the Building Code 2016 attached workplace relations conditions to contractors seeking Commonwealth funded work. It was repealed, and the Australian Building and Construction Commission abolished, through legislation passed in late 2022.
The difference this time is breadth. Integrity, payment, labour hire, apprenticeships and wellbeing could sit inside one framework rather than in separate schemes.
Who the standards could apply to is still open
This is the question that matters most to residential builders, and it has not been answered.
The paper asks what construction activity should be covered, which entities should be included, whether thresholds or scaling should apply, and what should be excluded. The entities listed for comment run from clients, developers and funders through to head contractors, subcontractors, labour hire providers and consultants.
Nothing in the paper says the standards would apply to private residential work. Their natural reach is work the Commonwealth funds or procures.
But Commonwealth money already reaches some housing. The paper notes that targets aligned with the Australian Skills Guarantee are being applied across a range of government investments, including the National Housing Accord. That shows how procurement conditions can travel beyond direct Commonwealth contracts and into funded programs.
Why smaller businesses sit in the flow through question
The most practical question in the paper is the last one.
Question 27 asks how compliance obligations should flow through contractual supply chains to subcontractors and smaller businesses, so responsibilities stay clear, commercially fair and free of unnecessary administrative burden.
That is where procurement standards tend to bite for smaller firms. A head contractor bound by a standard usually passes the requirement down the chain through its subcontracts.
A trade business that never deals with Canberra directly can still end up demonstrating compliance. The government’s FAQ says it is seeking feedback on regulatory burden and on whether thresholds or exemptions may suit different projects, organisations or activities. The paper also asks what consideration should be given to regional and remote operators.
A trade business that never deals with Canberra directly can still end up demonstrating compliance.
The states already attach conditions to public construction work
The Commonwealth would not be breaking new ground. Most states and territories already set conditions for businesses that want government construction work. They do it in different ways, and they are chasing different outcomes.
In Victoria, the Fair Jobs Code applies to government contracts of $1 million and above, including construction. Suppliers need a Pre Assessment Certificate covering standards such as compliance with employment and safety laws and secure employment. Contracts of $20 million or more also need a Fair Jobs Code Plan.
The ACT goes further down the scale. Under its Secure Local Jobs Code, a certificate is needed before quoting on territory construction work of any value. Construction projects of $200,000 or more also need a Labour Relations, Training and Workplace Equity Plan.
In New South Wales, companies tendering for government funded projects work under the state’s Industrial Relations Guidelines for building and construction procurement. Since 1 March 2026, a Supply Chain Initiative has added pre award compliance checks, a database of subcontractors on government sites and audits of wage and superannuation payments.
Other states focus on training and local workforce. Western Australia’s Priority Start Policy applies to state building, construction and maintenance contracts over $5 million, with a target that 11.5 per cent of construction trades workers on general building contracts are apprentices or trainees. Tasmania’s Building and Construction Training Policy requires 20 per cent of labour hours on government building works of $250,000 or more to be undertaken by apprentices, trainees or workers in training.
South Australia’s procurement framework sets minimums on major projects over $50 million: 90 per cent of labour hours for South Australian workers, and 20 per cent combined for apprentices, trainees, Aboriginal workers and the long term unemployed. The Northern Territory requires an Aboriginal Development Plan on infrastructure department construction contracts of $500,000 and above.
Queensland has moved the other way. It removed Best Practice Industry Conditions from government procurement from 1 January 2026, and the Commonwealth paper itself rules out replicating that scheme.
The way states regulate public construction work already varies widely. A builder working on public jobs across borders can face a different set of tests in each jurisdiction. The Commonwealth paper asks what barriers could stand in the way of nationally coherent standards, and invites the states to take part in the design. Whether a federal layer simplifies that patchwork or adds to it is one of the biggest unanswered questions.
Public money is becoming a policy tool for industry conduct
Nothing in this consultation creates an obligation today. No model exists yet, and a second round of consultation is expected before anything is settled.
What it does show is where policy thinking is heading. Access to public construction work is being looked at as a way to shape conduct, payment practices, workforce outcomes and safety across the industry, not just on government sites.
For businesses that work on government funded projects, or supply those that do, the scope and flow through questions will decide how far any standards reach. Submissions are open to businesses of all sizes until 16 October, and the department has said they will be published unless a submitter asks otherwise.
We will keep following this as the second stage of consultation takes shape. Subscribe to our weekly eNewsletter or catch the podcast to stay across it.
Frequently asked questions
They are potential minimum standards for the construction industry that the Federal Government is consulting on. The stated aim is for government financial arrangements to drive quality, productivity, lawful behaviour and safe, secure, well paid jobs. No model has been chosen, and the government says design, scope and implementation decisions have not been taken.
Submissions close on 16 October 2026 through the Department of Employment and Workplace Relations Consultation Hub. A second stage of consultation is expected later to test the design of any proposed model.
That has not been decided. The discussion paper asks stakeholders which construction activity and which entities should be covered, and whether thresholds or exemptions should apply. Nothing in the paper says private residential work would be included. The likely reach is work funded or procured by the Commonwealth, and obligations can flow down to subcontractors through contracts.
Yes. Victoria’s Fair Jobs Code, the ACT’s Secure Local Jobs Code and the NSW Industrial Relations Guidelines all attach conduct or employment requirements to government construction work. Western Australia, Tasmania, South Australia and the Northern Territory set training, local workforce or Aboriginal participation requirements on government projects above set values. Queensland removed its Best Practice Industry Conditions from 1 January 2026.
No. The discussion paper and FAQ state the government has no intention of requiring a union covered enterprise agreement as a condition of Commonwealth funding, or of preferencing those agreements when assessing tenders for federally funded building work.
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Last updated: 6 October 2026. Consultation details current as at this date.
General Information Only: This article provides general information about a government consultation and does not constitute legal, financial or professional advice. Proposals discussed may change or may not proceed. Readers should refer to the original government documents and seek independent advice relevant to their circumstances.
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