Decision ris proposal for national licensing of the property occupations

Table G.24: Additional time cost upon renewal due to mutual recognition

Assumptions	Unit	Value	Source
Additional time cost due to mutual recognition (renewal only)
Property services	% per licence	5%	Assumption based on information provided by the COAG National Licensing Taskforce and from jurisdictional regulators.

Removal of requirement to hold multiple licences across jurisdictions

Table G.25: Percentage of licensees domiciled in another jurisdiction

Assumptions	Unit	Value	Source
Percentage of licensees domiciled in another jurisdiction
NSW	%	3.87%	Unpublished data provided by the COAG National Licensing Taskforce, 27 July 2011. Data provided was consolidated across all occupations.
Vic	%	4.16%	Unpublished data provided by Victoria received January 2012.
Qld	%	4.45%	Unpublished data provided by the COAG National Licensing Taskforce, 27 July 2011. Data provided was consolidated across all occupations.
WA	%	1.11%	Unpublished data provided by Western Australia, received May 2012. The percentage has been based on data for both agents and representatives.
SA	%	6.21%	Unpublished data provided by the COAG National Licensing Taskforce, 27 July 2011. Data provided was consolidated across all occupations.
Tas	%	11.84%	Unpublished data provided by the COAG National Licensing Taskforce, 27 July 2011. Data provided was consolidated across all occupations.
ACT	%	33.14%	Unpublished data provided by the COAG National Licensing Taskforce, 27 July 2011. Data provided was consolidated across all occupations.
NT	%	9.69%	Unpublished data provided by the COAG National Licensing Taskforce, 27 July 2011. Data provided was consolidated across all occupations.

Given that the exact distribution of multiple licence holders across jurisdictions is unknown, migration flows from 2010–11 have been used as a proxy. The percentages have been calculated based on migration numbers provided in Australian Bureau of Statistics 2011, Australian demographic statistics, catalogue 3101.0, June quarter, Table 19 – interstate migration 2010–11.
Table G.26: Estimated distribution of licence holders that hold a licence, domiciled in another jurisdiction (based on ABS data as a proxy)

		Jurisdiction in which licence holders are domiciled
		NSW	Vic	Qld	WA	SA	Tas	ACT	NT	Total
Jurisdiction in which the multiple licences are held	NSW		24%	42%	6%	9%	3%	12%	3%	100%
	Vic	36%		28%	10%	13%	5%	4%	4%	100%
	Qld	48%	22%		7%	10%	4%	4%	6%	100%
	WA	23%	26%	22%		11%	3%	3%	13%	100%
	SA	26%	24%	26%	9%		5%	2%	8%	100%
	Tas	20%	25%	29%	7%	13%		3%	4%	100%
	ACT	57%	13%	16%	4%	4%	2%		3%	100%
	NT	21%	19%	29%	13%	13%	2%	3%		100%

Experience requirements

Under national licensing, experience requirements for all property licence holders would be removed, meaning some licensees could obtain their qualification sooner. The direct benefit to licence holders of removing experience requirements could be measured by the wage difference between unqualified real estate workers and fully accredited licence holders. The wage differential cannot be fully attributed to the experience requirement, as a variety of factors could affect wage levels. For the purposes of this analysis, it is assumed that a wage differential of 50 cents per hour can be attributable to the experience requirement.

The actual experience requirements in each jurisdiction vary. To provide an indicative estimate of the potential benefit, we have assumed a conservative estimate of one year for all jurisdictions that require an experience requirement.

Table G.27: Benefits associated with the removal of experience requirements

Assumptions	Unit	Value	Source__Proportion_of_real_GDP_attributable_to_the_property_services_industry'>Source__Increase_in_real_GDP_due_to_national_licensing'>Source
Assumed wage differential between agents and representatives attributable to experience requirement
All jurisdictions (where an experience requirement exists)	$ per licensee	$0.50 per hour	Assumption used in this report for indicative purposes
Years of experience required
All jurisdictions (where an experience requirement exists)	Years per licensee	1 year	Assumption used in this report for indicative purposes
Working hours per year
All jurisdictions	Hours per licensee	1,800	Assumption based on 7.5 working hours per day, 5 working days per week, 48 working weeks per year

Improved labour mobility

To provide an indication of the potential benefit due to an increase in labour mobility as a result of national licensing, this Decision RIS draws on the work undertaken in this area by the Productivity Commission. For the purposes of this analysis, the following assumptions have been used to calculate an indicative estimate.

Table G.28: Increase in real GDP due to national licensing

Assumption	Unit	Value	Source
Increase in real GDP due to national licensing
Increase in real GDP due to full labour mobility	%	0.3%	Productivity Commission 2009, Review of mutual recognition schemes: research report, Canberra, p. 73.
Proportion of full labour mobility attributable to national licensing	%	10%	This is a conservative assumption based on the professional judgement of PricewaterhouseCoopers. The aim of this estimate is to provide an indication of the potential impact in the context of mutual recognition, which has partly facilitated labour mobility under the base case.

Table G.29: Real GDP

Assumption	Unit	Value	Source
Real GDP
National real GDP in 2011	$	$1.335 trillion	Australian Bureau of Statistics 2011, Australian national accounts: national income, expenditure and product (gross domestic product, chain volume measures), catalogue no. 5206.0, December, 2012

Table G.30: The property industry as a proportion of real GDP

Assumption	Unit	Value	Source
Proportion of real GDP attributable to the property services industry
National	%	5.7%	This percentage is based on the total number of property licensees as a proportion of the total number of registered workers employed in Australia. Total employed persons as at March 2012 was 11.49 million, and there are 118,641 property licensees (see licence numbers above). Total employed persons, Australian Bureau of Statistics 2012, Labour force, Australia (Labour force status by sex), March 2012 catalogue no. 6202.
Registered workers as a percentage of total employed persons	%	18%	Productivity Commission 2009, Review of Mutual Recognition Schemes, Research Report, Canberra, page 48.

Business value-add (capital efficiency)

This benefit relates to the expectation that if reforms lead to more efficient property services – as would be expected if unnecessary licensing burdens are removed – then business will benefit from the value-add generated by a more efficient labour force.

The approach taken is to assume a ratio between the benefits to labour that sells property services and the benefits to consumers buying those services. The ratio of benefits to wages relative to benefits to profits is determined by using the ratio of labour to capital. For the purpose of this RIS, the impact (benefits and costs) to businesses and households that buy property services is assumed to be one-third of the direct impact to licensees, as shown in Table G.31.

Table G.31: Capital efficiency as a proportion of estimated labour efficiency

Assumption	Unit	Value	Source
Capital efficiency as a proportion of estimated labour efficiency
All jurisdictions	%	1/3 (i.e. 33.33%)	PricewaterhouseCoopers assumption based on Australian Bureau of Statistics 2011, Australian System of National Accounts 2010-11, Cat. No. 5204.0, ABS, Canberra.

Cost of continuing professional development requirements

Table G.32: Fees associated with continuing professional development requirements

Assumptions	Unit	Value	Source
Fees associated with continuing professional development requirements
NSW	$ per course	$199	Real Estate Institute of NSW, Skills to succeed and stay ahead A 12-point CPD course costs $199
WA	$ per course	$147	WA requires professionals to achieve 3 points for mandatory CPD training and 7 points for elective training. The cost of mandatory training is borne by the government through the Consumer Protection Division. The cost of this mandatory training is unidentified and has therefore been excluded from this analysis. Department of Commerce Consumer Protection Division, Compulsory professional development guide, March 2011, p. 10, For the required elective training, the average fee for an online course through Morton Learning is $149. This is in line with other providers; for example, KAPLAN Professional offers an online course for $145. An average of these two figures has been taken for this analysis. Morton Learning, Elective CPD Workshops KAPLAN Professional, WA CPD-Elective
Tas	$ per course	$245	KAPLAN Professional, TAS CPD The cost of an 8-hour CPD course is $245.
ACT	$ per course	$199	The ACT has advised that the cost in the ACT would be similar to that in NSW. Hence, NSW has been used as a proxy Real Estate Institute of NSW, Skills to succeed and stay ahead A 12-point CPD course costs $199.

CPD = continuing professional development
Table G.33: Time associated with continuous professional development requirements

Assumptions	Unit	Value	Source
Time associated with continuing professional development requirements
NSW	Hours	7.5	REINSW, Skills to succeed and stay ahead A course to meet CPD requirements can be completed in one day.
WA	Hours	10	Department of Commerce Consumer Protection Division 2011, Compulsory professional development guide, p. 10 CPD points accrue at 1 point per hour. Ten hours are required to meet 10point CPD requirements.
Tas	Hours	8	Property Agents Board, Continuing education Property services professionals are required to undertake 8 hours of CPD per year.
ACT	Hours	7.5	The ACT has advised that the cost in the ACT would be similar to that in NSW. Hence, NSW has been used as a proxy. REINSW, Skills to succeed and stay ahead A course to meet CPD requirements can be completed in one day.

CPD = continuing professional development

Changes to frequency of processing for agent’s representatives in Victoria