Why the government is exploring changes to construction industry regulations

The Federal government has flagged simpler construction sector regulations for builders and developers. This comes after a week of talks with industry and unions. The move comes as Australia’s construction sector struggles to keep pace with surging demand.

So, what changes are proposed and what has been the response?

What is the issue?

At present, Australia is struggling to meet its ambitious target to build 1.2 million new homes by 2029. Construction industry figures partly attribute this to the amount of regulations builders and developers have to deal with.

Housing minister Clare O’Neill said the government is exploring changes to the National Construction Code.   This is to speed up the process of building houses in the country.

“We have a crazy amount of regulation standing in the path of builders and developers today that is serving no purpose other than to delay and create more expensive housing bills for us,” she told The Financial Review.

“And if we’re going to lift the output of our residential construction sector, which is exactly what our government is trying to do, then that’s going to have to change.”

She said while many regulations are important, together they can become difficult to navigate for builders and developers. Many builders report that it often takes longer to approve a home than to build one.

What changes are proposed?

The government is currently exploring whether the National Construction Code needs to be updated as regularly as it currently is. At present, the code is updated every three years. However, many experts suggest it should instead be updated every five years.

Prior to the Federal Election, then opposition leader Peter Dutton had pledged it would only be changed every ten years.

O’Neill stressed that any changes to the code would not come at the expense of the quality of houses delivered.

State treasurers are also currently exploring ways to standardise commercial zoning laws across the country. Supporters argue that aligning these rules could remove another layer of complexity that slows projects and increases costs. Critics say the differences between states often leave national builders working with multiple sets of requirements, even on similar projects.

What has been the reaction?

While experts have welcomed the changes, they say it’s only a first step. Many want greater flexibility in how energy efficiency rules are applied.

>They argue that each new upgrade delivers smaller gains than the last, yet still adds to the cost and time needed to build homes. Some in the industry say energy efficiency requirements are important but should be balanced with the urgent need to get more homes built quickly.

Others point out that delays are not only costly for builders but also for buyers, who face longer waits and higher prices as a result.

Experts also want to see more action from state governments, who hold most of the levers to speed up housing approvals. In many cases, states and territories set their own timetables as to when regulations are introduced. Delays at this level can add months to a project’s timeline. With population growth and migration placing extra pressure on the Australian housing market, many say there is no time to waste.

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Article References

Bleby, M (8 August 2025) ‘O’Neil flags simpler rules for builders, developers’, Financial Review, accessed 11 August 2025.

Karp, P (5 August 2025) ‘Labor gives ground on removing construction red tape’, Financial Review, accessed 11 August 2025.

Karvelas, P (7 June 2025) ‘Housing Minister Clare O’Neil takes aim at Australia’s regulation red tape’, ABC News, accessed 11 August 2025.