The three tier, sub-option 2 is the preferred option in this Decision RIS. This option follows, to a very large extent, the proposals for categories, scopes of regulated work, eligibility requirements and other licence elements developed by the Plumbing and Gasfitting IAC. Some modifications to the original proposal have been made based on additional information received from industry and the submissions process more broadly. These include the addition of a restricted licence for urban irrigation and the restricted fire protection (inspection/ testing) licence.
The three tier, sub-option 2 provides a harmonised model which addresses COAG’s goal of improving labour mobility through national licensing. It provides a rationalised system which reduces some aspects of regulation identified as unnecessary while continuing to preserve existing safeguards for consumers and workers. It provides more appropriate mechanisms for addressing consumer and worker safety risks than the two tier option and does not increase the existing regulatory burden, as would have occurred with the higher qualification requirements proposed in three tier, sub-option 1.
The three tier, sub-option 2 represents the highest net benefit to the community, taking all impacts into account, when compared against the other options considered and it has industry support.
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1 General policy context
The Council of Australian Governments (COAG), in July 2008, agreed to wide-ranging regulatory reform to increase Australia’s productivity and provide the environment for a seamless national economy.
Many of the challenges facing the Australian economy can only be addressed through more coordinated regulatory arrangements. The COAG reforms aim to provide a more streamlined, consistent and targeted regulatory environment, reducing inefficiencies and duplication, removing red tape and facilitating flexible and productive operating conditions for businesses and workers across Australia. These reforms have the potential to make life simpler for businesses and
consumers, while continuing to provide the necessary protections and access for consumers and the community. National licensing forms one of 27 key areas for regulatory reform agreed in 2008, the majority of which have now been implemented. Implementation of the remaining reforms, including national licensing, is being overseen by the Business Advisory Forum Taskforce, which is composed of senior state and territory officials.
There is no consistent national licensing approach in Australia. Each state and territory uses a separate licensing approach, with different licence categories, scope of regulated work and eligibility requirements. This hinders labour mobility across Australia and increases the regulatory burden for licensees and government.
COAG agreed to develop a national licensing system with the following characteristics:
cooperative national legislation
national governance arrangements to handle standard-setting and policy issues and to ensure consistent administrative and compliance practices
all current holders of state and territory licences deemed across to the new licence system at its commencement
the establishment of a publicly available limited national register of licensees
no legislative role for the Commonwealth in the establishment of the new system.
National licensing is initially being considered for four occupational areas, which were chosen based on the following selection criteria:
at least one critical area of the occupation licensed across all jurisdictions
all have been subject to the work on achieving full and effective mutual recognition
the importance of the occupation to the economy in terms of level of demand, intrinsic mobility and number of licensees
the volume and nature of mutual recognition difficulties.
The four occupational areas are:
plumbing and gasfitting occupations
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electrical occupations
property occupations
refrigeration and air-conditioning occupations.
The development of a national licensing system was endorsed by the states and territories in April 2009 by the signing of the Intergovernmental Agreement for a National Licensing System for Specified Occupations (the Intergovernmental Agreement).
The implementation strategy of the 2009 decision foreshadowed further research and consultation to inform more detailed arrangements regarding the implementation of national licensing for each of the occupations identified. Policy development work was undertaken from 2009–11 and
culminated in a number of options for national licensing, which were included in the Consultation RIS for each of the occupations identified and released for public comment between July and August 2012.
The objective of this Decision RIS is to consider feedback received on the options proposed in the Consultation RIS and any further information that has come to light, and to recommend a preferred national licensing option, which provides the highest net benefit to the community, taking into account all the impacts.
National licensing is a threshold reform. It sets in place national licensing eligibility requirements and the related disciplinary framework, as the first step in developing a comprehensive national licensing scheme that could, once fully developed, encompass the requirements for both obtaining a licence and the behaviour and standards (conduct) required to maintain a licence.
Details on the policy development process undertaken, together with the objectives and principles which underpinned the work and the advisory mechanisms used, is provided at Attachment C.
The behaviours and standards (conduct) to be met by licensees are not currently part of the proposed national occupational licensing reform. A separate reform to potentially harmonise conduct requirements, commencing with property occupations, is being considered by the Legislative and Governance Forum on Consumer Affairs (formerly the Ministerial Council for
Consumer Affairs). The full benefits of a proposed national licensing system would be realised if this further reform were undertaken.
1.1 The Occupational Licensing National Law Act 2010
The Occupational Licensing National Law Act 2010 (the National Law) has been passed in six jurisdictions (New South Wales, Victoria, Queensland, South Australia, Tasmania and the Northern Territory). This Act is national framework legislation that seeks to establish national licensing.
The Bill for the National Law passed Western Australia’s Legislative Assembly on 24 November 2010 and was referred to the Western Australian Standing Committee on Uniform Legislation and Statutes Review. The Committee did not support the Bill in its current form and Western Australia will
consider its position on the Bill based on agreement of a preferred model following the Decision RIS.
The Australian Capital Territory has reserved its right not to implement national licensing if the costs to the Territory outweigh the benefits.
3 The National Law provides the high-level framework for national licensing policy and regulations. A copy of the National Law can be found on the national licensing website at www.nola.gov.au.
During the policy development process, it became clear that some amendments to the National Law are required. The release of the draft Amendment Bill and draft regulations occurred within the consultation period to allow for public comment to also occur on these.
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2 Options for reform
This chapter provides a brief overview of the options considered for a national licence for plumbing and gasfitting occupations and the reasons leading to the recommendation of the preferred option.
A detailed description of key elements of the rationale on which the selected elements are based is provided in Chapter 3.
2.1 Options considered
The options considered for the licensing of plumbing and gasfitting occupations were as follows:
Option 1: National licensing – Three tier option. A single consistent national approach to be introduced for obtaining a plumbing and/or gasfitting licence. This would allow a person to work anywhere in Australia where the relevant work is licensed without having to reapply for a licence or pay an additional fee. A contractor, a (full) licensee and a tradesperson registration holder would require a licence. There were two sub-options under this proposal:
- Sub-option 1: An approach whereby qualifications for a tradesperson registration are primarily set at the Certificate III level with full licensees requiring an additional set of Certificate IV units for each category. This represents an increase in qualification requirements for some jurisdictions compared with current practice.
- Sub-option 2: An approach whereby qualifications for a tradesperson registration are primarily set at a Certificate III level with full licensees requiring an additional set of Certificate IV units for each category, however the overall number of Certificate IV units of competency for new (full) licence holders is less than for sub-option 1. This largely represents the status quo for most jurisdictions, compared with current qualification requirements.
Option 2: National licensing – Two tier option. An approach whereby licensing is required at the contractor and (full) licence level only and a Certificate III qualification would be
sufficient to obtain a full licence. A single consistent national approach to be introduced for obtaining a plumbing and/or gasfitting licence. As for the three tier model, this would allow a person to work anywhere in Australia where the relevant work is licensed, without having to reapply for a licence or pay an additional fee. Under this model, only a (full) licence and a contractor licence would be issued.
Option 3: Automatic mutual recognition. This option proposed a ‘driver’s licence’ approach to national licensing, whereby each jurisdiction would continue to issue licences either against existing jurisdictional categories and associated regulated work, or against a harmonised set of categories and work and licences which have been declared equivalent following agreement by the states and territories. In both cases, these would be recognised by every other state and territory without the licensee having to reapply for a licence or pay an additional fee.
Option 4: Status quo. Under this option, states and territories would continue to license plumbing and gasfitting occupations as they currently do.
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2.2 Preferred option - requirements
The COAG RIS requirements are that a Decision RIS provide a clear statement as to which is the preferred option and why. The RIS should demonstrate that:
the benefits of the proposal to the community outweigh the costs; and
the preferred option has the greatest net benefit for the community, taking into account all the impacts.
There are a number of reasons why the ‘preferred’ model may not be the one with the highest economic benefit These include that the model with the highest economic benefit may not adequately address the risks presented, or may be extremely difficult to implement, given strong opposition by industry. Both factors apply to the proposals for national licensing in the plumbing and gasfitting occupations.
The preferred model is that selected after balanced consideration of all factors: it focuses on the economic cost and benefit but also takes into account appropriate risk mitigation approaches, stakeholder views and the impact on existing industry practices including niche markets.
As the work in this Decision RIS builds on previous consultation findings that were supportive of a national licensing system and which were subsequently endorsed by COAG through the signing of the Intergovernmental Agreement for a National Licensing System for Specified Occupations (the Intergovernmental Agreement) and passage of the Occupational Licensing National Law Act 2010 (the National Law), national licensing was considered the preferred model, compared with automatic mutual recognition and the status quo, subject to a cost–benefit analysis being undertaken of the different approaches proposed to national licensing.