Thresholds above which onerous safety requirements will apply to smaller residential construction projects in South Australia have been lifted in a move the state's Government says will reduce the compliance burden on small business and save on home building costs, according to media reports.

As the state continues to struggle with low rates of building activity, News Ltd has reported that the Government is lifting thresholds above which a range of safety requirements – including a principal contractor, work health and safety plan and signage – will apply from $250,000, to $450,000.

Acting Premier John Rau said industry and union consultation had shown that the obligations were excessive for smaller projects, and that the changes would ease the regulatory burden on residential builders without impacting upon safety.

“These details are important for larger construction builds but were creating an unintended burden for the projects at the lower end of this scale,” Rau said, adding that smaller scale building activity was important for local business and provides a range of employment opportunities for South Australians.

The moves come as the South Australian economy is struggling to find any momentum to drive growth forward amid a pull-back in resource sector work and the imminent shut down of the state’s automotive manufacturing sector.

Compared with 10-year averages, South Australia has the second-worst performing economy overall (above Tasmania) and the worst rate of unemployment, according to the latest ComSec State of the States report.

In terms of construction, the state has the worst performing sector overall and the second-lowest number of housing starts (compared with 10-year averages).

Indeed, while the state consistently built between 10,500 and 13,000 new houses and apartments throughout the 2000s, it is expected to break ground on just 9,860 this year and 9,630 in 2016, according to the Housing Industry Association.

Master Builders SA spokesman John Stokes welcomed the latest move, but called for similar thresholds to apply for the commercial sector.