The purpose of this Decision Regulation Impact Statement (RIS) is to recommend a preferred option for policy to underpin the establishment of a national licensing scheme for the electrical occupations. This follows stakeholder comment on the Consultation RIS.
The Decision RIS identifies the nature of the problem to be solved, and explains the rationale for selecting the model proposed and the elements that comprise the model. It will also assess the costs and benefits of the proposed model.
This Decision RIS follows the guidelines of the Council of Australian Governments (COAG) in the Best practice regulation guide. It has been approved for release by the Office of Best Practice Regulation.
PricewaterhouseCoopers was engaged by the COAG National Licensing Steering Committee to assist with the preparation of both the Consultation and the Decision RIS.
Summary of options canvassed in this Decision Regulation Impact Statement |
National licensing
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National licensing for electrical occupations across Australia has the potential to deliver significant ongoing net benefits (see Table S.1). Most benefits of national licensing go to business, workers and consumers. There are one-off costs, including costs to licensees and business to become aware of the proposed changes, and costs to government for the establishment of the National Occupational Licensing Authority (NOLA) and the public national licensing register and its supporting database. There are also ongoing costs to maintain NOLA and the national licensing register. How these costs will be covered is a matter for individual jurisdictions to determine and may, in some cases, be passed on to licensees via increased fees. This Decision RIS indicates that the benefits of the reform outweigh these costs.
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In comparing the total benefits and costs across all stakeholders, it would take less than one year for the benefits of the reform to start exceeding the costs nationally, and the benefits of the reform would continue to be realised long after the initial ten years presented in the cost-benefit analysis. Based on an indicative modelling exercise, a range of indicators show that these reforms are worthwhile, as can be seen in Table S.1.
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Table S.1: Net benefits of reforms to national licensing for electrical occupations, by jurisdiction
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NSW
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Vic
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Qld
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WA
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SA
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Tas
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ACT
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NT
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Total
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Ongoing net impact ($m per annum)
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13.27
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13.79
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16.39
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7.85
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7.00
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1.31
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0.72
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1.36
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61.69
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Community (licensees, business, households)
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13.67
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14.24
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16.81
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8.73
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7.23
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1.41
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0.85
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1.38
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64.32
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Government
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(0.41)
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(0.45)
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(0.42)
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(0.87)
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(0.22)
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(0.10)
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(0.13)
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(0.03)
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(2.63)
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One-off transition costs ($m)
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(6.45)
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(6.57)
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(6.95)
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(4.77)
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(2.64)
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(1.37)
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(1.01)
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(1.32)
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(31.08)
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Community (licensees, business, households)
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(5.23)
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(4.96)
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(5.42)
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(3.40)
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(1.73)
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(0.55)
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(0.41)
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(0.70)
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(22.41)
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Government
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(1.21)
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(1.61)
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(1.54)
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(1.37)
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(0.90)
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(0.81)
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(0.60)
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(0.62)
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(8.67)
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Total 10-year NPV ($m)
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80.58
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83.93
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100.64
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46.93
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43.33
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7.31
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3.82
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7.68
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374.22
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– excluding NOLA
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84.87
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87.74
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103.89
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48.97
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44.80
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8.13
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4.20
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8.19
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390.78
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Cost–benefit ratio of the total 10-year NPV
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8.33
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9.92
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11.58
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5.57
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11.64
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4.83
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3.20
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6.49
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8.59
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Payback period (years)
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0.49
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0.48
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0.42
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0.61
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0.38
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1.04
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1.40
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0.97
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0.50
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Rate of return (annualised percentage)
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206%
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210%
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236%
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165%
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266%
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96%
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72%
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103%
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199%
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NPV = net present value; NOLA = National Occupational Licensing Authority
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Note: The analysis does not account for changes in GST, payroll or other taxes. As some of the community benefits will be consumed as expenditure or enjoyed as higher wages, there will be an increase in GST and payroll revenues.
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Automatic mutual recognition
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Automatic mutual recognition was canvassed as an alternative to national licensing in the Consultation RIS. Only 8 per cent of submissions expressed support for this alternative. While automatic mutual recognition may deliver some of the benefits of national licensing over the short term, there are additional benefits of national licensing which are likely to be realised over the longer term. Notwithstanding the cost–benefit analysis, there would also appear to be overall long-term qualitative benefits with national licensing. Consequently, automatic mutual recognition is not recommended for the electrical occupations.
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