Jobs for tradies and skilled workers would be a target of the "JobMaker" package announced by Prime Minister Scott Morrison on Tuesday.
But the ACT government has taken aim at the proposed changes as Chief Minister Andrew Barr said it would need to meet the needs of local economies.
Ensuring there is enough work for tradespeople in the aftermath of COVID-19 is another challenge according to industry associations.
As part of the package, the federal government would put conditions on the $1.5 billion it gives to state and territories each year for vocational training to make them more in line. Mr Barr said elements of the scheme could work against the ACT.
"Nationally efficient pricing those things always work against smaller jurisdictions who lack the economies of scale so those sorts of questions will need to be considered in taking any reforms forward," he said.
ACT Minister for Tertiary Education Chris Steel also took aim at the reforms.
"After cutting the skills sector for a decade, we are concerned that the federal government now wants to a lead a race to the bottom of cheap, poor quality training that doesn't meet local needs," he said.
"Contrary to the federal government's claims the ACT is one of the only Australia jurisdictions that has seen increased demand for apprenticeships in recent years.
"Rather than labelling the skills system a dud, the federal government should fess up, reverse their cuts to skills training and stop blaming the states and territories."
However, "JobMaker" has been broadly welcomed by the industry.
Independent Tertiary Education Council Australia chief executive Troy Williams said the reforms were the right way to go.
"The Prime Minister is right, current funding arrangements that assist state and territory fund vocational training are broken. Students and their employers are bewildered by competing study and funding options. Reform is long over due," he said.
But a key concern for the package was to ensure there were projects in the pipeline to ensure tradies had work. It came after Master Builders Association estimated almost 7200 jobs could be lost in the ACT construction industry.
"Industrial relations and vocational education reform have long been areas of high priority for Master Builders and our members around the country," Master Builders ACT chief executive Michael Hopkins said.
"In the ACT, the construction sector is the second largest private sector industry, and once the economy recovers, we will need more qualified tradespeople to meet demand.
"Ensuring our apprentices have an effective vocational education and training system is crucial to increased productivity and growth."
One developer in Canberra has pressed ahead with its plans to build a $120 million project with 450 apartments and said it would deliver about 2000 jobs over the lifespan of the project.
JWLand has started construction on stages three and four of its Founders Lane project in Braddon.
JWLand head of national development Michael Prendergast said he felt the project signified the creation of many jobs and would play an instrumental role to assist the Canberra economy to recover.
"The vision we have for the project is one we are very proud of and we've committed to start construction because we see the confidence buyers have in the product," he said.
"It's good for everybody involved, not only the sentiment in the market but also the jobs that come out of it.
"Stability and confidence would probably flow from that as well."
Mr Prendergast said he also felt confident that Canberra would be able to bounce back.
"Canberra has always been a very safe market and it's always been a very consistent market we don't see the highs and lows that you commonly experience in Melbourne and Sydney," he said.
"I think there was a little bit of a difficult time there for a while but we have complete confidence in the Canberra market."
Stages one and two of the development, opposite the Canberra Centre, have already been completed and residents have moved in.