Decision ris proposal for national licensing of the property occupations

Flexible licence periods

Under current jurisdictional licensing arrangements, each state and territory has different licence periods, ranging from one year to a perpetual licence. The current licence periods for each jurisdiction are shown in Table 4.11. The Consultation RIS proposed moving to a standard three year period and provided costing on that basis, however consultation feedback supported a more flexible range of licence periods. The proposal in this document therefore provides for a choice of one, three or five year terms for each national licence.

Table 4.11: Current licence periods across jurisdictions

Jurisdiction	Agents (real estate, business and strata managing)	Agent’s representative	Auctioneer
NSW	1	1	1
Vic	1	(see note 1)	Not a separate category
Qld	3	3	3
WA	3	3	1 (see note 2)
SA	1	1	1
Tas	Perpetual licence (i.e. no renewal required)	n/a	Perpetual licence (i.e. no renewal required)
ACT	1	1	1
NT	1	1	1

Note 1: Changes to the frequency of processing agent’s representative applications in Victoria is discussed later in this chapter

Note 2: The one year licence period in WA for auctioneers has not been factored in to the impact analysis in Table 4.12 below.

In general terms, both licensees and jurisdictions benefit from a longer licence period, except Tasmania, as licensees save time in applying less frequently and jurisdictions do not have to process the applications. Introducing a choice of licence periods will benefit licensees as the flexibility will allow them to tailor their application to their individual needs and resources, however there will be a small increase in complexity for those jurisdictions not currently offering such a range of licence terms and it may make it more difficult to predict revenue. Table 4.12 provides indicative costings representing the benefit to licensed real estate agents if all licensees chose to select the maximum licence period, being a five year licence. These figures would represent a potential overestimate as there will be a variety of reasons why a licensee may not wish to avail themselves of the savings that might be presented should they opt for the longer period.

As a comparison, Tables 4.13 - 4.15 shows the impact for licensees under a range of alternative licence periods, from 3 years to a perpetual licence.

Licensees in Tasmania would incur a cost under national licensing from renewing their licence more often. In doing so, they would spend more time and pay greater fees across the ten-year period. Similarly, regulators would spend more time in processing these licence applications more often. If licensees opt to apply for a licence with a one-year period, the benefits of moving to a consistent licence period would be further reduced.

While the most benefit could be obtained, theoretically, by increasing the licence term to an even longer period, or by making a licence permanently valid, in practice a regular renewal period has a number of benefits for regulators and consumers, although they are not easily quantifiable. These include ensuring the contact details for each licensee are kept up to date on the public register, which also ensures robust compliance practices, providing the regulator with the opportunity to remove records for those no longer practising, so that number of skilled practitioners can be monitored and allowing for periodic checks on the currency of requirements such as personal and/or financial probity. It provides a set point at which licensees can be provided with information on changed requirements or standards, which may necessitate professional development or other activity and it provides a revenue stream to reimburse regulator activity

Table 4.12: Impact for licensees under a maximum licence period of five years

$ million	NSW	Vic	Qld	WA	SA	Tas	ACT	NT	National
Annualised ongoing impact	3.02	2.41	1.645	0.48	0.06	(0.01)	0.25	0.14	8.00
10-year NPV as at 1 July 2012	19.66	15.68	10.70	3.15	0.40	(0.07)	1.60	0.91	52.03

Table 4.13: Impact for licensees under a standard licence period of three years

$ million	NSW	Vic	Qld	WA	SA	Tas	ACT	NT	National
Annualised ongoing impact	2.52	2.01	–	–	0.05	(0.02)	0.21	0.12	4.88
10-year NPV as at 1 July 2012	16.38	13.07	–	–	0.33	(0.11)	1.34	0.75	31.76

Table 4.14: Impact for licensees under a standard 10 year licence period

$ million	NSW	Vic	Qld	WA	SA	Tas	ACT	NT	National
Annualised ongoing impact	3.40	2.71	2.879	0.85	0.07	(0.01)	0.28	0.16	10.34
10-year NPV as at 1 July 2012	22.12	17.64	18.72	5.52	0.45	(0.03)	1.80	1.02	67.23

Table 4.15: Impact for licensees under a standard perpetual licence

$ million	NSW	Vic	Qld	WA	SA	Tas	ACT	NT	National
Annualised ongoing impact	3.78	3.01	4.113	1.21	0.08	(0.00)	0.31	0.17	12.68
10-year NPV as at 1 July 2012	24.57	19.60	26.74	7.88	0.50	(0.00)	2.00	1.13	82.44

The impact quantified for Victoria in the tables above does not include the impact on property agent’s representatives, as they are not licensed through the regulator. The impact of moving from Victoria’s current employerbased registration scheme to a registration system with a set licence period is assessed separately below.

Although a 10 year licence period and a perpetual licence have benefits of $10.34 million and $12.68 million (annualised ongoing impact) respectively, the non-quantifiable benefits associated with a more regular renewal period mean that, on balance, a choice of 1, 3, or 5 years is the preferred longer licence period option.