Dris proposal for national licensing of the electrical occupations

58.1Impact on consumer outcomes

Under national licensing it is proposed that a number of current requirements for licensing be removed, on the basis that they represent an unnecessary regulatory burden for licence holders. Several of these requirements have the potential to affect outcomes for consumers, namely:

• 
  changes to licence terms
  
• 
  proposed changes in experience requirements
  
• 
  proposed removal of business competency units for contractors.
  

The following sections assess the potential impact of such changes on safety and consumer protection outcomes.

58.1.1Potential safety impacts

Attachment F of this Decision RIS provides a detailed analysis of the risks associated with electrical work. This research indicates that in the five years between 2003–04 and 2007–08 (the most recent data available), there were an average of 19 fatal electrical accidents in Australia, which occurred due to a broad range of problems; only a subset were attributable to the actions of licensed workers in the electrical occupations. The key consideration for this analysis is whether any of the proposed changes in licensing arrangements would alter safety outcomes for consumers (the focus of the analysis here is on the greatest potential impact on consumers).

An assessment of the potential risks associated with electrical work, and the proposed changes in the licensing arrangements, finds a weak correlation between risks to consumers and the proposals. Several changes are administrative in nature and do not alter the coverage of licensing across the industry (i.e. they do not remove a person from licensing altogether). The removal of experience requirements for electrical contractors does not fundamentally change the scope of work for those persons licensed under these arrangements, and therefore would not be expected to have a significant impact on consumer safety.

The establishment of the national licensing register enables the collection of more consistent information pertaining to regulatory matters which may impact on health and safety of workers and consumers.

58.1.2Consumer protection impacts

The second area of potential consumer impact is consumer protection. This relates to the extent to which the conduct of licensed persons leads to consumers being misled or defrauded (for instance, through the delivery of substandard work, where an individual or business fails to deliver services that consumers have purchased, or where an individual or a business experiences financial difficulties that affect consumers).

The key areas of reform where consumer protection may be affected are:

• 
  changes in licence terms, which may have an influence on compliance and enforcement actions by regulators (to the extent that a change to a longer licence term made it more difficult to monitor the conduct of licence holders)
  
• 
  removal of requirements for business competency units.
  

Changes to licence terms would not alter licence requirements, though they would potentially lengthen the time between renewal, and therefore the time period for regulators to receive updated information. Across the entire licence period, whatever its length, compliance and enforcement would continue to be required – renewal is just one element of the process.

In relation to business competency units, these units may improve the financial and business management skills of licence holders, though this addresses one particular consumer protection risk (financial management of contractors).

Around 40 per cent of those responding through the electronic survey agreed that there be no skills-based requirements applied to electrical contractors. Approximately 46 per cent, however, disagreed and major industry stakeholders expressed a strong view that there should be specific qualifications for electrical contractors. This is founded on the belief that there is a risk to consumers and individuals if a business is managed badly or fails completely.

58.2Comparing the impacts of national licensing on licensees

Of the impacts that have been quantified in this analysis, there are two impacts that relate only to those licensees and businesses that work across more than one jurisdiction. These are:

• 
  benefits from improved labour mobility
  
• 
  benefits from the removal of multiple licences held across jurisdictions.
  

To demonstrate the impact of national licensing on those who work in a single jurisdiction versus those who operate across multiple jurisdictions, Table 4.26 shows the quantified impacts separated out for each of these groups. The separation of the results has been calculated based on:

• 
  the percentage of licensees in each state and territory domiciled in another jurisdiction
  
• 
  the estimated distribution of multiple licence holders across each of the jurisdictions.
  

For more detail on these two assumptions, see Attachment H.

Table 4.26: Comparison of the impacts of national licensing on licensees working in a single jurisdiction versus licensees working across more than one jurisdiction

$ million	NSW	Vic	Qld	WA	SA	ACT	NT	Tas	Total
Impacts on those who currently operate in only one jurisdiction
Ongoing impact per annum	0.23	3.19	4.84	2.32	3.03	0.06	0.06	0.25	13.97
Transition cost	(5.85)	(6.07)	(6.35)	(4.58)	(2.41)	(0.78)	(1.04)	(1.16)	(28.25)
Impacts on those who operate in more than one jurisdiction
Ongoing impact per annum	13.04	10.60	11.55	5.53	3.97	0.67	1.29	1.06	47.72
Transition cost	(0.59)	(0.50)	(0.60)	(0.19)	(0.22)	(0.23)	(0.28)	(0.21)	(2.83)
Total impact
Ongoing impact per annum	13.27	13.79	16.39	7.85	7.00	0.72	1.36	1.31	61.69
Transition cost	(6.45)	(6.57)	(6.95)	(4.77)	(2.64)	(1.01)	(1.32)	(1.37)	(31.08)