A bold proposal has been put forward to increase the tax-free threshold to $45,000 for construction apprentices.

BuildSkills Australia, which is part of federal government agency Jobs and Skills Australia, made the suggestion in a bid to shore up tradie numbers.

The tax-free threshold is currently at $18,200. Some first-year apprentices are making as little as $16 an hour, meaning they are earning well below $45,000 a year.

The construction industry is already crippled by a huge worker shortage of 141,000, with the figure set to increase to 300,000 next year.

'Low wages are a major barrier to apprenticeship retention, particularly among older workers,' a BuildSkills spokesman said.

'Increasing the tax-free threshold to $45,000 for construction apprentices would provide immediate take-home pay relief, making apprenticeships a more attractive career pathway.'

National Centre of Vocational Education Research data revealed only 105,790 construction apprentices were in training at the end of 2025.

The figure is the lowest it has been in the last five years.  

Master Builders Australia chief economist Shane Garrett said the statistics painted a grim outlook.

'Over 7,600 new construction apprentices started out during the December 2025 quarter,' he told Yahoo.

'Encouragingly, this was 10 per cent up on the same period a year earlier.

'However, apprentice numbers are still getting hammered by worryingly high withdrawal rates. 

'During 2025, 28,290 construction apprentices exited their training early and without any qualifications.

'It means that the number of people who quit construction apprenticeships last year was higher than those who successfully completed their training.'

Master Builders Australia CEO Denita Wawn said a shortage of workers would have negative implications on building supply.

'Without them, targets will be missed and supply will fall further behind demand,' she said. 

The Albanese government has set a commitment to build 1.2million new homes by 2029.

In March, the National Housing Supply and Affordability Council revealed just 219,000 homes have been completed, suggesting the target won't be met until mid-2030 

NSW is already on track to fall short of its target of 377,000 new homes by 2029.

The latest NSW budget rolled out several measures to help reach the target, focusing on cheaper and more efficient forms of construction. 

The measures include $32.3million over four years to establish a Modern Methods of Construction facility, aimed at cutting construction times by harnessing prefabrication, modular construction and digital technologies.