Governments say they want more homes. Their policies are making it harder for the small, skilled builders who actually deliver them to survive.
For the past 35 years, I have watched—and helped train—carpenters and joiners as they developed from apprentices into tradespeople, supervisors and small-business owners.
These are the people who produce something genuinely home-grown. They employ local trades, train the next generation and build the homes in which every-day Australians raise their families. At their best, they deliver honest advice, reliable workmanship and knowledge passed from one pair of hands to another.
That model is becoming further and further removed from reality.
Layer upon layer of regulation, taxation, insurance requirements and administrative obligations are being imposed upon an industry that policymakers often appear to understand only in pieces. Each new reform is presented as a solution to one problem, yet too little attention is paid to how the entire system fits together—or to the cumulative burden placed upon the person who signs the building contract.
In Victoria, the new Building and Plumbing Commission brings regulation, domestic building dispute resolution and domestic building insurance into a single body. Its stated goals—better quality, stronger consumer protection and a simpler system—are worthwhile. But any regulator entrusted with such extensive power must include genuine, influential representation from people who have built homes, employed apprentices, managed trades, carried fixed-price contracts and personally lived with the financial consequences of those decisions.
Consumer protection designed without practical industry knowledge can become self-defeating. It can force competent builders out, increase prices and leave consumers with fewer experienced people willing to take on their projects.
Now the Federal Government is proposing another major change: a 30 per cent minimum tax on the taxable income of certain discretionary trusts from 1 July 2028.
This is not just another tax adjustment. For building and construction, it could be a shock to the foundations of the small-business model.
Why hardworking small builders should be furious
Builders did not invent discretionary trusts as some clever new loophole.
For decades, accountants, lawyers and industry advisers told family businesses to operate through the right structure. Separate business risk from family assets. Protect what you have spent your life building.
Now, after builders relied on that lawful professional advice, government is effectively saying that structure may no longer produce the tax outcome it once did. Pay substantially more—or spend a fortune restructuring.
And the suggestion that a builder can “just restructure” shows an extraordinary lack of understanding of how construction businesses operate.
A building business can be tied to builder registration and nominated directors; domestic building insurance and eligibility; financial capacity and maximum contract limits; existing contracts and statutory warranties; supplier accounts, finance and personal guarantees; employees, apprentices and payroll; plant, vehicles and property ownership; company history, reputation and prequalification; and taxation, capital gains tax and potentially state duties.
You cannot simply create another ABN on Monday morning and carry on as though nothing happened.
Master Builders Australia estimates that a small family-owned construction business with taxable income of $400,000 could face a tax increase of up to 70 per cent, one-off restructuring costs of between $82,000 and $175,000, and additional annual costs of between $21,000 and $67,500.
Those are industry-modelled figures, not a prediction of the outcome for every business. But the underlying risks are entirely credible. Restructuring can involve accountants, lawyers, lenders, insurers, regulators, contracts, leases and state revenue authorities. A federal tax rollover cannot simply make all those commercial consequences disappear.
These are not multinational corporations with legal, taxation and compliance departments on every floor. They are local family builders and tradespeople employing apprentices, supporting suppliers and building homes in their communities.
The cruel contradiction of “protecting the family home”
Most Australians go to work to secure a home and a future for their families.
Builders go to work knowing that one failed project, one contractual dispute, one unpaid progress claim, one insurer changing its appetite, or one personal guarantee may threaten the very home they worked to provide.
What other career asks ordinary Australians to accept that contradiction as the price of doing their job?
A trust has never provided absolute protection. Personal guarantees, director duties, insolvent-trading laws and the way assets and contracts are arranged can still expose people. but a properly established trust has been one lawful layer of risk management in an industry that is volatile, cyclical and unusually exposed.
To allow and encourage families to structure their affairs in that way—and then change the rules without adequately accounting for the consequences—is a profound failure of policy continuity.
The government says more than 90 per cent of small businesses will not be affected in any given year and that expanded rollover relief will be available for three years from 1 July 2027. But that national statistic does not answer the construction industry’s concern. Master Builders says about 20 per cent of building and construction businesses rely on trust structures.
Nor does tax rollover relief resolve licensing, insurance, finance, contracts, leases, warranties or state-duty consequences.
Where the industry is headed
Unless governments change direction, I see six major outcomes.
- The middle of the industry will be hollowed out
The most endangered builder is not necessarily the backyard cowboy or the national corporation. It is the competent family builder employing five, ten or twenty people.
These businesses are large enough to carry enormous contractual and compliance exposure, but too small to maintain permanent legal, taxation, human resources, safety and compliance departments.
Some will deliberately shrink. Others will merge, sell or leave the industry altogether.
- Builders will become administrators who happen to build
An increasing share of a builder’s day is consumed by insurance eligibility, financial reporting, safety documentation, energy and National Construction Code compliance, employment regulation, contracts, consumer law, product certification, tax administration and licensing requirements.
Paperwork and accountability are necessary. But the system increasingly rewards the business with the strongest administrative infrastructure—not necessarily the builder with the deepest construction knowledge or the best-trained workforce.
- The costs will be transferred to homeowners
Government frequently speaks as though new compliance and restructuring costs remain inside the business. They do not.
They become higher preliminaries, larger margins and risk allowances, more expensive professional advice, fewer fixed-price contracts, fewer builders willing to undertake complex renovations, and higher prices for homes.
There is no magical account from which a builder can absorb another $100,000 in restructuring costs.
- Risk will become concentrated in fewer businesses
As smaller operators leave, larger organisations will receive a greater share of the work. That may appear safer on a spreadsheet, but it creates concentration risk.
When one volume builder fails, thousands of homeowners, subcontractors and suppliers can be harmed at once. A diverse ecosystem of financially sound local builders is itself a form of consumer protection.
Policies that unintentionally favour large corporate operators—including overseas-owned entrants—must be assessed not only for short-term housing numbers, but for workmanship, accountability, local economic value and the preservation of Australian trade capability. Scale is not a substitute for skill.
- Skilled tradespeople will leave—or refuse to become builders
A carpenter watching what registered builders endure may reasonably ask: Why would I take on the registration, insurance, taxation, contractual and personal risk?
They can remain a subcontractor, earn a respectable income and avoid much of the liability carried by the registered builder.
Australia does not merely have a trade-skills shortage. It increasingly has a willingness-to-assume-builder-risk problem.
If our best carpenters no longer want to become builders, who will employ and mentor the next generation? Who will carry practical knowledge from one generation to the next?
Trade capability is not preserved in a policy document. It is passed from person to person, on real projects, over many years.
- Experience will move outside conventional contracting
Experienced builders will increasingly choose consulting, project advisory, owner-builder mentoring, inspections, education, development for themselves, or a small number of carefully selected cost-plus projects.
That decision may be rational for the individual. But every experienced builder who withdraws from ordinary domestic contracting represents a loss to the broader consumer market.
This is cumulative policy failure
The trust proposal is not an isolated issue. Every individual rule may have a defensible purpose: consumer protection, tax fairness, workplace safety, energy efficiency, employee protection or financial stability.
The failure is that nobody appears to be measuring the combined load placed upon the small builder who must make all those systems work together in the real world.
We are moving towards an industry that is more corporatised, expensive, and risk-averse; less innovative and accessible to young builders; and increasingly detached from practical trade knowledge.
That threatens more than individual businesses. It threatens apprenticeship opportunities, local supply chains, workmanship, regional capability and the Australian dream of owning a well-built home.
Australia cannot regulate, tax and insure builders as though they are dangerous institutions while simultaneously expecting them to solve the housing crisis.
What must happen now
The answer cannot be limited to telling builders to restructure. Nor is a narrow transition period sufficient.
At a minimum, government should provide a permanent exemption for genuine small businesses; full grandfathering of established operating structures; a construction-specific regulatory impact assessment; protection for existing warranties, registrations, insurance eligibility and contracts; genuine representation by practising registered builders—not only accountants, economists, lawyers and administrators; and a cumulative-impact test covering taxation, licensing, insurance and building regulation together.
For 35 years, I have watched tradespeople learn, improve, employ others and pass their knowledge forward. I have seen what happens when a young carpenter becomes a capable builder and creates opportunities for an entire network of apprentices, trades, suppliers and families.
That is the foundation of this industry. Once it is broken, it will not be rebuilt by importing a corporate brand, publishing another framework or appointing another administrator.
The central question is no longer simply how many homes Australia needs, rather who will still be prepared to become a registered builder after government has finished protecting everyone from the builder—but has done nothing to protect the builder?
Until policymakers can answer that question, they do not have a credible plan for Australia’s housing future.
