Dris proposal for national licensing of the electrical occupations

2Options for reform

This chapter provides a brief overview of the options considered for a national licence for electrical occupations and the reasons leading to the recommendation of the preferred option. A detailed description of key elements of the rationale on which the selected elements are based is provided at Chapter 3.

2.1Options considered

The following options were considered for electrical occupations:

Option 1: National licensing

A national licensing system would provide a single policy approach to licence categories, regulated work and the eligibility requirements to obtain an electrical occupational licence. This would allow a person to work anywhere in Australia where the relevant work is licensed without having to reapply for a licence or pay any additional fee. The only exception to this would be the small proportion of instances where the second jurisdiction licenses a category not licensed in the person’s primary jurisdiction. A national licensing register would be established.

Option 2: Automatic mutual recognition

This option proposes a ‘driver’s licence’ approach to national licensing whereby each jurisdiction would continue to issue licences either under existing jurisdictional categories and associated scopes of regulated work, or under a harmonised set of licence categories and regulated work which have been declared equivalent, following agreement by the states and territories. In both cases, licences would be recognised by every other state and territory without the licensee having to reapply for a licence or pay an additional fee.

Option 3: Status quo

This option would involve no change from current arrangements.

Previous consultation findings were supportive of a national licensing system. This approach was subsequently endorsed by COAG through the signing of the Intergovernmental Agreement for a National Licensing System for Specified Occupations (the Intergovernmental Agreement) and passage of the Occupational Licensing National Law Act 2010 (the National Law). Following further consultation arising from the release of the Consultation RIS in 2012, national licensing remains the preferred option, compared with automatic mutual recognition and the status quo. This is supported by the cost–benefit analysis undertaken concerning the different approaches proposed.

2.2Preferred option - requirements

The COAG Best Practice Regulation Guide²² requires that the RIS should provide a clear statement as to which is the preferred option and why. The RIS should demonstrate that:

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  the benefits of the proposal to the community outweigh the costs
  
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  the preferred option has the greatest net benefit for the community, taking into account all the impacts.
  

In considering the status quo, the Consultation RIS did not discuss options for maintenance of the existing jurisdictional arrangements per se but considered a ‘base case’ (status quo) for assessing the impact, both quantitative and qualitative, of the introduction of national licensing.

Automatic mutual recognition meets some of the objectives of national licensing, however, it is essentially a hybrid of the status quo and national licensing and does not easily enable or embody a consistent national approach to standard setting and policy.

A total of 1,106 submissions were received on the Consultation RIS. Submissions were received in a number of ways: electronic survey responses, use of the hard copy template and other submissions that focused on particular elements of the proposed model. Stakeholders expressed support for the concept of national licensing in 85 per cent of submissions. Automatic mutual recognition was favoured in around 8 per cent of submissions.

2.3Option 1 – National licensing

National licensing is the preferred option for electrical occupations. National licensing would achieve significant benefits through improved labour mobility and reduced red tape for businesses and licensees. While this benefit would be greatest for larger companies working in multiple jurisdictions, it would also be felt by small businesses, which would more readily be able to attract staff from other states and territories and understand the scope of the licences prospective employees may hold.

Under national licensing, licence requirements would be consistent in all jurisdictions and uniform licence categories would be issued. A national policy framework would apply overseen by a national occupational licensing authority, which would help ensure consistency. National legislation and policy development processes would underpin the system and provide a mechanism for ensuring that the system remained sustainable and that there was a forum in which to resolve jurisdictional differences.

Key features of national licensing for the electrical occupations include:

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  A licensee would be able to work anywhere in Australia without having to reapply or pay for a licence when they move to another jurisdiction within Australia.
  
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  A central licensing authority, the National Occupational Licensing Authority (NOLA), would be responsible for developing (with Ministerial Council approval) national licence policy for each occupational area and would oversee its consistent application by jurisdictional regulators. National licence policy includes:
  

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  the licence categories that should apply
  
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  the regulated work that can be undertaken by the holder of a licence category
  
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  who can apply for a licence (e.g. individuals and body corporates)
  
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  skilled and non-skilled eligibility requirements (e.g. qualifications, personal and financial probity)
  
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  other licence characteristics (e.g. exemptions or exclusions)
  

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  Jurisdictional regulators would administer the system as delegates of NOLA, under the National Law.
  

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  Licence applicants will be able to choose between one year, three year and five year licence periods.
  

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  Current requirements for annual mandatory continuing professional development would be removed in the jurisdictions where they apply. Skills maintenance would be prescribed on an as needs basis.
  
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  There would be no requirement for retesting at licence renewal time. If the licence is not renewed within three months of its expiry a new licence application would be required and the current qualification requirements need to be met.
  
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  There would be standard qualification and eligibility requirements across all jurisdictions and there would be no additional experience requirements for obtaining a licence.
  
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  There would be no skill or business qualification requirement for a contractor’s licence (contractors not holding a licence to undertake the technical work would need a nominee).
  
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  Personal and financial probity requirements would be made consistent.
  

Licensees choosing to work in an additional jurisdiction would still need to comply with any relevant jurisdiction-specific conduct and compliance requirements that apply to work they intend to perform.

Chapter 3 contains the full description of the proposed national licensing model for the electrical occupations, which includes the qualification requirements, personal and financial probity requirements and classes of persons exempt from licensing. The proposed model has been informed by the policy development work undertaken by the Electrical Occupation Interim Advisory Committee (IAC), the COAG National Licensing Steering Committee (the Steering Committee), the Interim Electrical Occupational Licensing Advisory Committee and stakeholder feedback from the consultation process. Attachment E contains member lists for the Steering Committee and the IAC.

Chapter 4 sets out the impacts associated with national licensing as well as an estimate of the potential flow-through benefits associated with increased labour mobility and returns to business from national licensing. A payback period is also included to highlight the length of time that will be needed for the benefits to offset the transition costs. This payback period is quite short, while the benefits are expected to be ongoing. A ten-year net present value is $377.1 million, however, the reform’s effects could theoretically be considered over a longer time period, which would result in a larger net benefit (as the benefits are expected to continue beyond the ten-year time period provided for in this analysis).

2.3.1Conduct requirements

The regulation of the behaviours and standards (conduct requirements) to be met by licensees following the attainment of a licence would not be within the scope of this reform. A separate reform, which seeks to harmonise conduct requirements commencing with property occupations, is being considered under the auspices of the Legislative and Governance Forum on Consumer Affairs (formerly the Ministerial Council for Consumer Affairs). The full economic benefits of national licensing would be realised if conduct requirements are reformed to provide for national standards for behaviour. However, under national licensing licensees will be responsible for meeting any jurisdictional requirements for operating in a particular jurisdiction.