A more resilient economy and your new home build

What this report is, and why homeowners should care

In August 2025 the Productivity Commission (PC) released an interim report on how to make Australia's economy more dynamic and resilient. "Interim" meant it was a draft for consultation, so the ideas could change before government decided what to do.

Update: The PC released its final report on 19 December 2025. The core ideas stayed: a 20% company tax rate for most firms and a 5% net cashflow tax. The main change was a 28% rate for the largest firms, rather than leaving them at 30%. The rest of this post discusses the interim report.

The focus in this paper is tax and regulation — the rules that shape how businesses invest and how fast projects move through approvals.

Why should you care if you're planning a build? Because the PC links slow, complicated approvals and layered regulation to delays and higher costs across the economy, housing included (Report, p. 4–5).

When approvals take longer, holding costs rise, rental extensions stretch out, and builders juggle start dates and subcontractor availability. When rules are confusing, design revisions and extra requests add time and uncertainty.

You don't need to be an economist to get the gist: simpler, better-run rules and investment-friendly settings make it easier for the people who design, approve and build your home to do their jobs on time and to standard.

In this post we translate the PC's proposals into plain English and spell out what they could mean for your build's time, cost and quality.

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Start your program with an approvals timeline you can actually defend — list each step, who owns it, likely duration, and the contingency you’ll carry.

The headline proposals at a glance

Here's the plain-English version of the big ideas in the interim paper: the ones that could shape how businesses invest and how fast projects, including housing, get through approvals.

Company tax settings (two-tier to start)

The PC proposes cutting the company tax rate to 20% for most firms (those under a $1 billion turnover threshold) while leaving the largest firms at 30% initially. The idea is to lift after-tax returns for a very large share of businesses, nudging more investment in equipment, systems, and expansion (Report, p. 2–3).

A new 5% net cashflow tax (NCFT)

Alongside company tax, the PC sketches an NCFT that lets businesses immediately expense new capital spending (rather than depreciating it slowly). That immediate write-off is designed to make investment decisions easier and faster. The PC frames the NCFT as investment-friendly and intended to be roughly revenue-neutral over the medium term (Report, p. 2–3).

A whole-of-government push to trim regulatory drag

The PC wants explicit, measurable targets to cut the cost of regulation, paired with stronger checks when new rules are proposed. That includes tougher cabinet scrutiny, an empowered Office of Impact Analysis, and clearer roles for parliamentary committees to keep an eye on cumulative burden (Report, p. 3).

“Regulatory stewardship” and accountability

Regulators wouldn’t just write and enforce rules; they would also be measured on the costs they impose and the quality of their processes — including timeliness and predictability for applicants. If progress stalls, the PC floats the idea of “regulatory budgeting” to cap the total burden (Report, p. 3–4, 49–50).

What this means for a homeowner

If investment picks up and approvals become simpler and more predictable, you could see better product availability, fewer administrative surprises and more reliable timelines. In Queensland, most new houses on a standard lot only need building approval from a private certifier, not a council DA, so approval delays mostly affect land releases, complex sites and properties with overlays.

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When you request builder and designer quotes, ask how they handle approvals and compliance today — and how they’re investing in tools or processes to cut delays.

red blocks on brown wooden table — Photo by Tierra Mallorca / Unsplash

Why the PC says the economy needs a reset

The report's diagnosis is simple: investment is too low and the rule book has become too slow and complex. Businesses hold back on new equipment or expansion when returns are thin and approvals are uncertain (Report, p. 1). That flows through supply chains, from manufacturers to builders, and lands on homeowners as longer lead times, price swings and delays (Report, p. 4–5).

The report also points to stretched approvals, with major development applications taking many months in some places and energy projects taking years. Not all the examples are housing, but the PC argues the same patterns show up across sectors: more layers, duplicated checks and patchy regulatory practice (Report, p. 4–5).

The net effect is higher holding costs for projects and more risk for anyone trying to plan a start date.

The PC's message: lift investment and clean up regulatory processes so projects move from idea to construction more predictably. For homeowners, that's about reducing the friction in the steps before a shovel hits the ground.

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Add realistic float to your plan. Build in contingency for council and referral time, and set check-ins with your designer to respond quickly to requests for more information.

red and white no smoking sign — Photo by Mark König / Unsplash

Tax reform — what it could mean for builders and suppliers

Two tax ideas in the interim paper could change how construction businesses invest over the next few years:

A lower headline company tax rate for most firms, and a 5% net cashflow tax (NCFT) that immediately expenses new capital spending (Report, p. 2–3).

How this might flow through the build ecosystem

More headroom to invest. A 20% company tax rate (for firms under the $1 billion turnover threshold) leaves many builders, subcontractors and local manufacturers with a larger after-tax surplus. The PC’s intent is to lift the return on upgrading equipment, software and skills.
Faster write-offs under the NCFT. Immediate expensing makes purchases like CNC saws, prefab tables, dust extraction, QA tools, drones, and project software easier to justify because the tax benefit arrives up-front, not drip-fed through depreciation.
Investment and GDP uplift (directional, not guaranteed). The PC expects these settings to raise investment and output over time, but that depends on how businesses respond.

What homeowners might notice (over time)

Availability and scheduling. If suppliers add capacity (more production lines; better logistics), lead times may improve and mid-build product swaps could become less common.
Quality and fewer defects. Investment in digital take-off, coordination and QA can reduce rework — which often shows up as extra days and variations on site.
Prices are uncertain. A lower tax bill doesn't automatically flow through to prices. That depends on competition, demand and contracts, so treat any price effect as a maybe, not a promise.

Transition and caveats

Different rates for big and small firms. The largest firms would pay a higher rate (30% in the interim report, 28% in the final), so different parts of your supply chain could face different incentives.

Regulation reform — approvals, oversight and “regulatory stewardship”

The report also lays out a plan to make rules less confusing and approvals more predictable.

The PC’s idea is simple: measure the burden, reduce it, and hold decision-makers to account for timeliness and quality — not just for enforcing rules.

What’s on the table

Targets to cut regulatory burden. Government would publish measurable goals to reduce cost and delay, then report progress transparently.
Stronger scrutiny before new rules land. Tougher cabinet checks, an independent commissioner leading the Office of Impact Analysis, and clearer roles for parliamentary committees to watch cumulative impacts.
Regulatory “stewardship.” Regulators would be judged on service quality — including timeliness, consistency, and predictability for applicants — not only on enforcement.
A back-stop if progress stalls. The PC floats “regulatory budgeting,” which would cap total burden and force trade-offs if agencies want to add new requirements.

What this could mean for your build

Time

If governments set measurable targets to cut regulatory burden and hold agencies to account for timeliness, approvals could become more predictable, with less back-and-forth and fewer surprises.

For a homeowner, that looks like tighter design programmes, earlier booking of trades, and less “dead time” waiting on RFIs.

Cost

Holding costs grow when approvals drift. Smoother processes mean fewer redraws, fewer extra consultant hours and lower holding costs. On the supply side, tax settings that encourage investment may, over time, improve capacity and logistics.

Quality

Predictable approvals let your designer, engineer and builder coordinate earlier and lock in details before the job starts. That lowers the odds of late changes, the usual cause of site errors, rework and variations. If businesses invest in better tools and equipment, expect fewer defects and more consistent finishes (Report, p. 1–3).

Performance

Better coordination up front leaves time to get thermal performance, moisture management and durability right before approval, rather than value-engineering on the fly later.

Compliance

Nothing in the report rewrites the NCC or Australian Standards. The aim is to make the pathway around those rules less tangled, so compliance is clearer and faster to show.

Analog clock at 12 am — Photo by Djim Loic / Unsplash

Limits and where bias might show up

Scope choices

The report focuses on company tax and the regulatory system as a whole. Planning reform, state-by-state DA practice and housing construction productivity are only touched on; housing productivity is covered in separate PC work.

Where bias could appear (and how to read it)

Modelled gains. The report expects investment and GDP to rise under the proposed tax approach, but that relies on behavioural responses. If business confidence or competition is weak, the effect could be smaller or slower.
Regulatory burden targets. Setting targets is one thing; resourcing agencies and aligning incentives is another. The report argues leadership and accountability are decisive, which is fair, but implementation risk remains.
Selection of examples. The approvals case studies span sectors (including energy projects with long lead times). The direction applies to housing, but the specific durations cited aren’t always residential DAs; keep that generalisation in mind.

What this means for homeowners

Assume direction, not certainty. Less friction around approvals and more investment in capability is a useful planning assumption, but don't bank on specific time or price wins until governments respond and the changes bed in.

Frequently Asked Questions

1) What is the "net cashflow tax", and how is it different from company tax?
The PC proposes a 5% net cashflow tax that lets businesses deduct new capital spending immediately, bringing the tax benefit forward to encourage investment. It would sit alongside company tax, which would drop to 20% for most firms.

2) Will a lower company tax rate make building a new home cheaper?
It might help indirectly by funding investment in capacity, tools and logistics that cut delays and rework. But there's no guarantee it shows up in your price.

3) How could the regulatory reforms speed up approvals?
By setting measurable targets to reduce regulatory burden, checking new rules harder before they're added, and holding regulators accountable for timeliness and predictability, not just enforcement.

4) Has the final report been released?
Yes. The PC released its final report on 19 December 2025. It kept the 20% company tax rate for most firms and the 5% net cashflow tax, with a 28% rate for the largest firms. Whether any of it happens is now up to government.

5) What can I do now to manage approval risk on my project?
Ask your builder for a timeline of each approval step, who's responsible and how long each usually takes. Budget for holding costs, finalise your design early to avoid late changes, and answer any requests for information quickly.

6) Where does housing construction productivity fit in?
It's covered in separate PC work. Don't assume this report covers every housing lever in depth.

Making Australia’s Economy More Resilient: What It Means for Your New Home Build

What this report is, and why homeowners should care