The following tables provide details on all the key data sources and assumptions made in the impact analysis for this report. In some areas assumptions have been made where data is not readily available. Where these assumptions are made, the method for making the assumption is explained in the text and tables below.
4.3.1.1 Real discount rate
All future cost and benefit cash flows will be discounted to 2012 dollars using a real discount rate of 7 per cent in line with the requirements of the Best practice regulation handbook, which also recommends sensitivity testing using 3 per cent and 10 per cent discount rates.46
Table 4.45: Discount rate and sensitivities
Assumption Unit Value Source
Discount rate
Real discount rate % per Headline: 7% Australian Government 2010, Best practice regulation
43 It is possible that this is not the case – that is, some hours saved could add to leisure time rather than increase productive hours of work. While an increase in leisure time would be expected to increase welfare, this would not be picked up in MMRF since it only considers market impacts.
44 The amount paid to government is based on the ABS 2005–06 input–output table. The total fee has been inflated to 2011 dollars as the cost saved under the cost–benefit analysis is in 2011 dollars.
45 The amount consumed by each of the state and territory governments of public services is based on the ABS 2005–06 input–output tables and inflated to 2011 dollars.
46 Australian Government 2010, Best practice regulation handbook, p. 66.
4: Impact analysis
126 annum Sensitivity: 3%, 10% handbook, page 66
4.3.1.2 Evaluation period
The Best practice regulation handbook states that ‘the total period [of evaluation] needs to be long enough to capture all potential costs and benefits of the proposal’ and provides guidance that ‘in view of the difficulty of forecasting costs and benefits over long periods, exercise caution when adopting an evaluation period longer than … 20 years’.47 Accordingly, an evaluation period of 10 years has been used, with sensitivity testing using 15 and 20 years.
The operating start date for phase 1 of national licensing is 1 July 2013, as advised by the National Licensing Taskforce.48
Western Australia has advised that its operating start date is uncertain, particularly due to the timing of the Western Australian state election in March 2013. This has not been reflected in the cost–
benefit analysis.
Table 4.46: Timing of analysis and sensitivities
Assumptions Unit Value Source
Timing
Operating start date date 1 July 2013 Unpublished advice provided by COAG National Licensing Taskforce
Evaluation period years Headline: 10 years Sensitivity: 15, 20 years
Assumption based on advice in the Best practice regulation handbook, page 63
4.3.1.3 Wage rate
A jurisdiction-specific wage rate has been used in the analysis, based on data available from the Australian Bureau of Statistics relating to employee earnings and hours.49
Hourly cash earnings
Data on hourly cash earnings for plumbers and gasfitters has been sourced from the Australian Bureau of Statistics, Employee earnings and hours (catalogue 6306.0) using the Australian and New Zealand Standard Classification of Occupations (ANZSCO) codes.
According to the ANZSCO code 334, plumbers install, maintain and repair pipes, drains, guttering and metal roofing, and provide mechanical services and related equipment for water supply, gas, drainage, sewerage, heating, cooling and ventilation systems. ANZSCO suggests that an indicative skill level for this occupation is an Australian Qualifications Framework Certificate III including at least two years of on-the-job training, or an Australian Qualifications Framework Certificate IV.50 It is also noted that in some cases at least three years of relevant experience may substitute for the formal qualifications listed above. It is acknowledged that these wage rates overestimate the wage rate for apprentices, as it is expected that this granularity of data will not impact on the robustness of the estimates.
47 Ibid.
48 Phase 1 of national licensing includes the following occupations: electrical, plumbing and gasfitting, property, and air-conditioning and refrigeration mechanics.
49 Australian Bureau of Statistics 2010, Employee earnings and hours, catalogue 6306.0, May, viewed 26 April 2012, www.abs.gov.au/ausstats/[email protected]/mf/6306.0.
50 Australian Bureau of Statistics, ANZSCO – Australian and New Zealand Standard Classification of Occupations, 1st edn, revision 1, viewed 26 April
201www.abs.gov.au/ausstats/[email protected]/Product+Lookup/F003AE0AA29DED4DCA2575DF002DA6E6?opendocument.
4: Impact analysis
127 The hourly cash earnings rates below are based on ordinary time worked per person (excluding overtime), based on the specific hours worked in each jurisdiction.51
It is assumed that as the activities involved with national licensing are ancillary to employment, the cost of time is the wage rate that can be earned in the industry (i.e. hourly cash earnings).
On-cost and overheads
According to the Australian Bureau of Statistics labour costs survey (2002–03), an on-costs multiplier of 1.172 is appropriate for the ‘electricity, gas and water supply’ industry52 that includes:
employee earnings
superannuation
payroll tax
worker’s compensation
fringe benefits tax.53
In the absence of any other information, the Victorian guide to regulation suggests that an overheads multiplier of 1.75 is appropriate.54 The Victorian Treasury suggests that overhead costs include building costs (floor space, fixtures and fittings maintenance and services), equipment, consumables, IT and other support services, administrative support and corporate overheads (senior management, corporate finance, human resources and legal services).
Due to the characteristics of this industry, including a high proportion of self-employed individuals who have lower overheads and fewer on-costs (i.e. no payroll tax and superannuation benefits), an overheads and on-cost multiplier of 1.5 is applied to the hourly cash earnings of plumbers and gasfitters.
Inflation rate
In order to inflate the hourly cash rates to 2012 dollars, the national consumer price index (CPI) for the period March 2010 to March 2012 has been used based on data from the Australian Bureau of Statistics (catalogue 6401.0).55 Note that the national CPI figures have been used (the Australian Bureau of Statistics only publishes CPI figures quarterly).
While ideally the wage rates would be inflated to 1 July 2012 (as the net present value is calculated as at 1 July 2012), the most recent data available when writing this report was CPI figures from March 2012.
51 Australian Bureau of Statistics, Employee earnings and hours, catalogue 6306.0, May, viewed 26 April 2012, www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/6306.0May%202010?OpenDocument#Publications.
52 The ‘electricity, gas and water supply’ industry is the closest available proxy available for the plumbing and gasfitting occupations.
53 Australian Bureau of Statistics, Labour costs, Australia, 2002–03, catalogue 6348.0.55.001, viewed 26 April 2012, www.abs.gov.au/AUSSTATS/[email protected]/Lookup/6348.0.55.001Main+Features12002-03?OpenDocument.
54 Department of Treasury and Finance (Victoria) 2011, Victorian guide to regulation: Appendices, edition 2.1.
55 March 2010 is the closest figure available to May 2010.
4: Impact analysis
128 Table 4.47: Wage rate assumptions
Assumption Unit Value Source
Hourly cash earnings
NSW $ per hour $28.20 Australian Bureau of Statistics, Employee earnings and hours, catalogue 6306.0, May 2010, Australian and New Zealand Standard Classification of Occupation (ANZSCO) Code 334 ‘Plumbers’, Table 1B,
www.abs.gov.au/ausstats/[email protected]/mf/6306.0
Note: Based on ‘ordinary time per person’ (excluding overtime) Vic $ per hour $25.90 Australian Bureau of Statistics, Employee earnings and hours, catalogue
6306.0, May 2010, Australian and New Zealand Standard Classification of Occupation (ANZSCO) Code 334 ‘Plumbers’, Table 1C,
www.abs.gov.au/ausstats/[email protected]/mf/6306.0
Note: Based on ‘ordinary time per person’ (excluding overtime) Qld $ per hour $31.60 Australian Bureau of Statistics, Employee earnings and hours, catalogue
6306.0, May 2010, Australian and New Zealand Standard Classification of Occupation (ANZSCO) Code 334 ‘Plumbers’, Table 1D,
www.abs.gov.au/ausstats/[email protected]/mf/6306.0
Note: Based on ‘ordinary time per person’ (excluding overtime) WA $ per hour $27.20 Australian Bureau of Statistics, Employee earnings and hours, catalogue
6306.0, May 2010, Australian and New Zealand Standard Classification of Occupation (ANZSCO) Code 334 ‘Plumbers’, Table 1F,
www.abs.gov.au/ausstats/[email protected]/mf/6306.0
Note: Based on ‘ordinary time per person’ (excluding overtime) SA $ per hour $29.50 Australian Bureau of Statistics, Employee earnings and hours, catalogue
6306.0, May 2010, Australian and New Zealand Standard Classification of Occupation (ANZSCO) Code 334 ‘Plumbers’, Table 1E,
www.abs.gov.au/ausstats/[email protected]/mf/6306.0
Note: Based on ‘ordinary time per person’ (excluding overtime) Tas $ per hour $22.40 Australian Bureau of Statistics, Employee earnings and hours, catalogue
6306.0, May 2010, Australian and New Zealand Standard Classification of Occupation (ANZSCO) Code 334 ‘Plumbers’, Table 1G,
www.abs.gov.au/ausstats/[email protected]/mf/6306.0
Note: Based on ‘ordinary time per person’ (excluding overtime) ACT $ per hour $34.50 Australian Bureau of Statistics, Employee earnings and hours, catalogue
6306.0, May 2010, Australian and New Zealand Standard Classification of Occupation (ANZSCO) Code 334 ‘Plumbers’, Table 1I,
www.abs.gov.au/ausstats/[email protected]/mf/6306.0
Note: Based on ‘ordinary time per person’ (excluding overtime) NT $ per hour $26.10 Australian Bureau of Statistics, Employee earnings and hours, catalogue
6306.0, May 2010, Australian and New Zealand Standard Classification of Occupation (ANZSCO) Code 334 ‘Plumbers’, Table 1H,
www.abs.gov.au/ausstats/[email protected]/mf/6306.0
Note: Based on ‘ordinary time per person’ (excluding overtime) On-costs and overheads multiplier
On-costs and overheads multiplier
Multiplier 1.5 Assumption based on Australian Bureau of Statistics labour cost survey data and guidance material from the Victorian Competition and Efficiency Commission
Inflation rate (March 2010 to March 2012)
4: Impact analysis
129
Assumption Unit Value Source
Inflation rate % 4.97% Australian Bureau of Statistics, Consumer Price Index, Australia, catalogue 6401.0, March 2012,
www.abs.gov.au/AUSSTATS/[email protected]/Lookup/6401.0Main+Features1M ar%202012?OpenDocument
Note: Inflation index from March 2010 (index number of 171.0) to March 2012 (index number of 179.5)
4.3.1.4 Industry growth rates (employment)
The net industry growth rate represents the number of people leaving and entering the industry per year.
The proportion of new applicants only takes into the consideration the number of new entrants in the industry. For this rate, in the absence of jurisdiction-specific information, a national figure based on data from the Australian Bureau of Statistics labour mobility survey has been used in the cost–
benefit analysis. The ‘electricity, gas, water and waste services’ industry is the closest available proxy for the plumbing and gasfitting occupations.
Table 4.48: Industry growth rates (employment)
Assumptions Unit Value Source
Net industry growth – national Plumbing and
gasfitting – total
% per annum
1.183% IBISWorld Industry Report (E4231), Plumbing Services in Australia, April 2012 – annual change in employment, page 34
Average of current and projected rates for 2011–12 to 2016–17. This growth rate is based on industry statistics and does not consider jurisdiction-specific circumstances
Proportion of new applicants in the industry (new applicants as a proportion of existing licensees) All jurisdictions % per
annum
4.07% Australian Bureau of Statistics, Labour mobility, February 2010, catalogue 6209.0, Table 7, page 23
Calculated as the number of employees that entered into a different industry division in the last 12 months, as a proportion of the total number of employees in the ‘electricity, gas, water and waste services’
industry during that time
4.3.1.5 Licence fees
The licence fees presented below are the current fees (at the time of writing) under the existing jurisdiction-based licensing schemes.
4: Impact analysis
130 Table 4.49: Licence fees – contractor licence
Assumption Unit Value Source
Cost of licence fee – contractor (new licence fee)
NSW $ per licensee $586 Based on information provided by NSW regulator on 29 February 2012
Weighted average used for individuals ($521 for 44,287 licensees), partnerships ($756 for 2,050 licensees) and corporations ($885 for 8,467 licensees)
Vic $ per licensee – There is no contractor licence in Victoria
Qld $ per licensee $603.40 Based on information provided by Queensland on 31 May 2012.
Fees are based on BSA contractor licence fees for category SC2 (up to $300K)
WA $ per licensee $578.50 Plumbers Licensing Board, Plumbing contractor’s licence,
www.plumbers.wa.gov.au/Content/Licensing/Plumbing_Contractors _Licence_A.html
Application fee ($52.50) and licence fee ($526)
SA $ per licensee $510.40 Consumer and Business Services, Fees for licensing – plumbers, www.ocba.sa.gov.au/licensing/fees.html#Plumbers,_Gas_Fitters_an d_Electricians_Act_1995
Based on application fee ($173) and a weighted average of the licence fee for natural person ($308) and body corporate ($455) Based on information provided by South Australia in May 2012, the weighted average is based on 20% of contractors being a body corporate and 80% being a natural person
Tas $ per licensee $462 Workplace Standards Tasmania, Current fee schedule,
www.wst.tas.gov.au/resources/fees/Occupational_Licensing_fees Workplace Standards Tasmania has advised that the licence fees for plumbing and gasfitting occupations are currently under review ACT $ per licensee $650 ACT Planning and Land Authority, Fees and Charges 2011-2012,
viewed 26 April 2012,
<http://www.actpla.act.gov.au/__data/assets/pdf_file/0004/18148/
Fees_Charges_2010-11_amended_20120217.pdf>
Application fee (payable upon first applying for a licence) of $200 and licence fee of $450.
NT $ per licensee – There is no contractor licence in the NT
4: Impact analysis
131 Table 4.50: Licence fees – (full) licence holder
Assumption Unit Value Source
Cost of licence fee – (full) licence holder (new licence fee)
NSW $ per licensee $193 Based on information provided by NSW regulator on 29 February 2012
Based on licence fee for qualified supervisor certificate Vic $ per licensee 308.25 Plumbing Industry Commission, Licensing and registration,
www.pic.vic.gov.au/www/html/139-licensing-and-registration-fees.asp
Application fee ($47)and registration fee ($261.25) Qld $ per licensee $165.14 Weighted average of plumbers, gasfitters and fire licensees
Plumbers:
Plumbing Industry Council, Schedule of application fees established under the Plumbing and Drainage Act 2002 and set in Plumbing and Drainage Regulation 2003,
www.dlgp.qld.gov.au/resources/plumbing/licensing/plumbing-fees-schedule.pdf
Application fee ($53) and licence fee ($110) Gasfitters:
Application fee ($35.20) and five years of the pro rata annual fee ($23.50). Based on information provided by Queensland on 31 May 2012
Fire:
Three year occupational fire licence ($238.45). Based on information provided by Queensland on 31 May 2012
WA $ per licensee $216.10 Plumbers Licensing Board, Tradesperson’s licence,
www.plumbers.wa.gov.au/Content/Licensing/Tradespersons_Licence _Applica.html
Application fee ($21.10) and licence fee ($195)
SA $ per licensee $388 Consumer and Business Services, Fees for licensing – plumbers, www.ocba.sa.gov.au/licensing/fees.html#Plumbers,_Gas_Fitters_and _Electricians_Act_1995
Application fee ($173) and registration fee ($215) Tas $ per licensee $294 Workplace Standards Tasmania, Current fee schedule,
www.wst.tas.gov.au/resources/fees/Occupational_Licensing_fee Workplace Standards Tasmania has advised that the licence fees for plumbing and gasfitting occupations are currently under review ACT $ per licensee $650 ACT Planning and Land Authority, Fees and Charges 2011-2012,
viewed 26 April 2012,
<http://www.actpla.act.gov.au/__data/assets/pdf_file/0004/18148/F ees_Charges_2010-11_amended_20120217.pdf>
Application fee (payable upon first applying for a licence) of $200 and licence fee of $450.
NT $ per licensee $70 Plumbers and Drainers Licensing Board, Application forms, www.plumberslicensing.nt.gov.au/forms
It is assumed that the published renewal fee is the same as the application fee for a journeyman (worker)
4: Impact analysis
132 Table 4.51: Licence fees – tradesperson registrations
Assumption Unit Value Source
Cost of licence fee – tradesperson registration (new licence fee)
NSW $ per licensee $126 Based on information provided by NSW regulator in May 2012 Vic $ per licensee $341.70 Plumbing Industry Commission, Licensing and registration,
www.pic.vic.gov.au/www/html/139-licensing-and-registration-fees.asp
Application fee ($47)and registration fee ($294.70)
Qld $ per licensee $104 Plumbing Industry Council, Schedule of application fees established under the Plumbing and Drainage Act 2002 and set in Plumbing and Drainage Regulation 2003,
www.dlgp.qld.gov.au/resources/plumbing/licensing/plumbing-fees-schedule.pdf
Application fee ($53) and licence fee for provisional licensees ($51) WA $ per licensee $216.10 Plumbers Licensing Board, Tradesperson’s licence,
www.plumbers.wa.gov.au/Content/Licensing/Tradespersons_Licence _Applica.html
Application ($21.10) and licence fee ($195)
SA $ per licensee $388 Consumer and Business Services, Fees for licensing – plumbers, www.ocba.sa.gov.au/licensing/fees.html#Plumbers,_Gas_Fitters_and _Electricians_Act_1995
Application fee ($173) and registration fee ($215) Tas $ per licensee $294 Workplace Standards Tasmania, Current fee schedule,
www.wst.tas.gov.au/resources/fees/Occupational_Licensing_fees Workplace Standards Tasmania has advised that the licence fees for plumbing and gasfitting occupations are currently under review ACT $ per licensee $500 ACT Planning and Land Authority, Fees and Charges 2011-2012,
viewed 26 April 2012,
<http://www.actpla.act.gov.au/__data/assets/pdf_file/0004/18148/F ees_Charges_2010-11_amended_20120217.pdf>
Application fee (payable upon first applying for a licence) of $200 and licence fee of $300 for Journey Person.
NT $ per licensee $35 Plumbers and Drainers Licensing Board, Application forms, www.plumberslicensing.nt.gov.au/forms
It is assumed that the published renewal fee is the same as the application fee for a journeyman (worker)
4: Impact analysis
133 Table 4.52: Renewal licence fees – contractor licence
Assumption Unit Value Source
Cost of renewal licence fee – contractor
NSW $ per licensee $526 Based on information provided by NSW regulator on 29 February 2012 Weighted average used for individuals ($462 for 44,287 licensees), partnerships ($695 for 2,050 licensees) and corporations ($822 for 8,467 licensees)
Vic $ per licensee – There is no contractor licence in Victoria
Qld $ per licensee $274.75 Based on information provided by Queensland on 31 May 2012. Fees are based on BSA contractor renewal licence fees for category SC2 (up to
$300K)
WA $ per licensee $526 Plumbers Licensing Board, Plumbing contractor’s licence,
www.plumbers.wa.gov.au/Content/Licensing/Plumbing_Contractors_Lic ence_A.html
SA $ per licensee $381.50 Consumer and Business Services, Fees for licensing – plumbers, www.ocba.sa.gov.au/licensing/fees.html#Plumbers,_Gas_Fitters_and_El ectricians_Act_1995
Average of renewal fee for natural person ($308) and body corporate ($455)
Tas $ per licensee $462 Workplace Standards Tasmania, Current fee schedule,
www.wst.tas.gov.au/resources/fees/Occupational_Licensing_fees Workplace Standards Tasmania has advised that the licence fees for plumbing and gasfitting occupations are currently under review ACT $ per licensee $450 ACT Planning and Land Authority, Fees and Charges 2011-2012, viewed
26 April 2012,
<http://www.actpla.act.gov.au/__data/assets/pdf_file/0004/18148/Fee s_Charges_2010-11_amended_20120217.pdf>
NT $ per licensee – There is no contractor licence in the NT
4: Impact analysis
134 Table 4.53: Renewal licence fees – (full) licence holder
Assumption Unit Value Source
Cost of renewal licence fee – (full) licence holder
NSW $ per
licensee
$0 Based on information provided by NSW regulator on 29 February 2012.
Note: NSW regulator has advised that this fee is under review, but as at March 2012 there is no fee associated with the renewal of (full) licences.
Despite this, a cost to government of processing renewals of $59 has been assumed for the purposes of calculating government savings. This cost would cover activities such as sending renewal notices to licensees. This value is based on information provided by the NSW regulator on 29 February 2012
Vic $ per
licensee
$261.25 Plumbing Industry Commission, Licensing and registration,
www.pic.vic.gov.au/www/html/139-licensing-and-registration-fees.asp
Qld $ per
licensee
$111 Plumbing Industry Council, Schedule of application fees established under the Plumbing and Drainage Act 2002 and set in Plumbing and Drainage Regulation 2003,
www.dlgp.qld.gov.au/resources/plumbing/licensing/plumbing-fees-schedule.pdf
Application fee ($53) and renewal fee ( $58)
WA $ per
licensee
$195 Plumbers Licensing Board, Tradesperson’s licence,
www.plumbers.wa.gov.au/Content/Licensing/Tradespersons_Licence_Appli ca.html
SA $ per
licensee
$215 Consumer and Business Services, Fees for licensing – plumbers,
www.ocba.sa.gov.au/licensing/fees.html#Plumbers,_Gas_Fitters_and_Electr icians_Act_1995
For a three year registration period
Tas $ per
licensee
$294 Workplace Standards Tasmania, Current fee schedule,
www.wst.tas.gov.au/resources/fees/Occupational_Licensing_fees Workplace Standards Tasmania has advised that the licence fees for plumbing and gasfitting occupations are currently under review
ACT $ per
licensee
$450 ACT Planning and Land Authority, Fees and charges 2011–2012,
www.actpla.act.gov.au/__data/assets/pdf_file/0004/18148/Fees_Charges_
2010-11_amended_20120217.pdf
Average of licence fees for entity ($450) and individual ($300)
NT $ per
licensee
$70 Plumbers and Drainers Licensing Board, Application forms, www.plumberslicensing.nt.gov.au/forms
4: Impact analysis
135 Table 4.54: Renewal licence fees – tradesperson registration
Assumption Unit Value Source
Cost of renewal licence fee – tradesperson registration
NSW $ per
licensee
$0 Based on information provided by NSW regulator on 29 February 2012.
Note: NSW regulator has advised that this fee is under review, but as at March 2012 there is no fee associated with the renewal of (full) licences.
Despite this, a cost to government of processing renewals of $59 has been assumed for the purposes of calculating government savings. This cost would cover activities such as sending renewal notices to licensees. This
Despite this, a cost to government of processing renewals of $59 has been assumed for the purposes of calculating government savings. This cost would cover activities such as sending renewal notices to licensees. This