Announcing a ban on non-compete clauses (NCCs) for workers earning less than $175,000 per annum, as part of the 2025 Federal Budget, Treasurer Jim Chalmers cited e61 research showing non-compete clauses could be holding the average worker’s wage back by about $2,500 per year.

The e61 research, outlined in its June 2023 report, The ghosts of employers past: how prevalent are non-compete clauses in Australia? relied heavily on evidence about the pervasiveness of NCCs revealed in the McKinnon Poll and subsequent surveys of businesses by the Australian Bureau of Statistics.

The McKinnon Poll is an online survey of 3,000 respondents weighted to census data to enhance representativeness. It solicits demographic and employment information (i.e. gender, age, income, industry, occupation, union membership) as well as past and prospective employment status and job mobility.

Speaking on ABC Radio National Breakfast about the changes, e61 CEO, Michael Brennan, said the evidence compiled by his team “suggests that (NCCs) do have an impact on the tendency to pay staff lower wages … about four per cent less” in business that use the clauses.

Mr Brennan said the overseas evidence to back Australian employers’ claims that NCCs incentivise them to train staff was “mixed”.  

Consumers also benefit because workers are free to start businesses, and existing businesses can deliver products and services by attracting talented staff more easily, increasing choice and competition.

“The ban on non-competes, restrictions on their use, generally will be pro-productivity, pro-competition, pro-choice for consumers,” Mr Brennan said.

McKinnon provided the seed funding that helped establish e61 and remains its major funding source.

McKinnon CEO, Mike Baird, said the policy shift demonstrated how the work of McKinnon was delivering real and tangible benefits, including improved labour mobility, increased productivity and competition, and benefits for consumers.

“These changes are underpinned by robust research and evidence, which aligns with McKinnon’s desire to improve the quality of policy formulation in Australia,” Mr Baird said.

“This approach helps deliver better governments for a stronger Australia.”