Dris proposal for national licensing of the plumbing and gasfitting occupations



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Decision Regulation Impact Statement

Proposal for national licensing of the plumbing and gasfitting occupations




The Council of Australian Governments’ National Licensing Steering Committee has prepared this Decision Regulation Impact Statement, with assistance from PricewaterhouseCoopers. Its purpose is to inform a decision by the Standing Council for Federal Financial Relations on the approach to national licensing for the plumbing and gasfitting occupations.


Copyright Notice

© Commonwealth of Australia 2013

ISBN:

ISBN 978 1 921916 10 6 (print)



ISBN 978 1 921916 11 3 (PDF)

This work is licensed under a Creative Commons Attribution 3.0 Australia licence.


The details of the relevant licence conditions are available on the Creative Commons website (accessible using the links provided) as is the full legal code for the CC BY 3 AU licence.



This is the second stage of a two-stage Regulation Impact Statement (RIS) process which includes a Consultation RIS followed by a final Decision RIS.

The purpose of this Decision RIS is to present the costs and benefits of options associated with national occupational licensing reform to assist the Council of Australian Governments (COAG) in its decision making on reform paths. This Decision RIS incorporates jurisdictional and stakeholder views on reform paths following a consultation process. Consultants were commissioned by the COAG National Licensing Taskforce to prepare the Decision RIS, and it incorporates views that have been brought to the attention of the consultants. Extensive information has also been provided by jurisdictions on the costs and benefits of policy approaches and the detail of the licensing arrangements in each jurisdiction.


Table of contents


Decision Regulation Impact Statement i

Decision Regulation Impact Statement i

Proposal for national licensing of the plumbing and gasfitting occupations i

Proposal for national licensing of the plumbing and gasfitting occupations i

Table of contents iii

Table of contents iii

About this Decision Regulation Impact Statement x

About this Decision Regulation Impact Statement x

Summary of options considered in this Decision Regulation Impact Statement xi

Summary of options considered in this Decision Regulation Impact Statement xi

Quantified impacts for the national licensing options xii



Executive summary xiii

Executive summary xiii

Purpose of the Decision Regulation Impact Statement xiii

Purpose of the Decision Regulation Impact Statement xiii

The problem xiii

The problem xiii

Government objectives for reform xiv

Government objectives for reform xiv

Options considered xv

Options considered xv

Preferred option xv

Preferred option xv

Overview of alternative options to national licensing xvi

Overview of alternative options to national licensing xvi

Automatic Mutual Recognition xvi

Status quo xvii

Factors in determining preferred national licensing option xvii

Factors in determining preferred national licensing option xvii

the licence categories that should apply xix

the regulated work that can be undertaken by the holder of a licence category xix

who can apply for a licence (e.g. individual or body corporate) xix

skilled and non-skilled eligibility requirements (e.g. qualifications, personal and financial probity) xix

other licence characteristics (e.g. exemptions or exclusions) xix

National licensing – costs and benefits xxi

National licensing – costs and benefits xxi

Impacts for licensees xxiv

Impacts for business and consumers xxiv

Safety and consumer outcomes xxv

Impacts for government xxv

Additional wider economic impacts xxvi

Consultation process and outcomes xxvi

Consultation process and outcomes xxvi

Other features of national licensing xxviii

Other features of national licensing xxviii

Fees xxviii

Licence period xxviii

Responsibilities of the national authority and jurisdictional regulators xxx

Conclusion/Recommendation xxxi

Conclusion/Recommendation xxxi



General policy context 1

General policy context 1

1.1 The Occupational Licensing National Law Act 2010 2

Options for reform 4

Options for reform 4

1.2 Options considered 4

1.3 Preferred option - requirements 5

1.4 ‘Preferred’ national licensing option – Three tier sub-option 2 5

Consultation feedback 8



1.5 Automatic mutual recognition 9

Existing Mutual Recognition Arrangements 9

Automatic mutual recognition – unharmonised approach 9

Consultation 11

Conclusion 11

National licensing – overview of preferred option 12

National licensing – overview of preferred option 12

1.6 Preferred option -Three tier, sub-option 2 - overview 12

Proposed categories of regulated work 12

The proposed national licensing categories across the jurisdictions 13

Proposed regulated work 15

Endorsements 17

Nominees 18

Exemptions 18

Limited exemptions 19

Non-skills-based eligibility requirements 19

Relevant person 19

Proposed personal probity eligibility requirements 20

Proposed financial probity requirements 22

Qualification-based eligibility requirements 24

Plumbing and services – Operations stream elective 25

Common compulsory units: 25

Plumbing and services – Operations stream core 25

OR 26

Common compulsory units: 26

Plumbing and services – Operations stream electives: 26

Common compulsory units: 26

OR 28

Experience requirements 28

Additional testing 29

Skills maintenance (continuing professional development) 29

Licence period 29

1.7 Rationale for proposed national licensing elements 29

Proposed categories of regulated work 29

Proposed regulated work 41

Endorsements 45

Nominees 49

Exemptions 51

Limited exemptions 52

Non-skills-based eligibility requirements 53

Qualification-based eligibility requirements 55

Qualification requirements for preferred option 55

Experience requirements 62

Additional testing 63

Skills maintenance (continuing professional development) 64

Licence period 65



1.8 Transitional arrangements 66

Deeming of current licence holders 66

Administrative transactions that were initiated before national licensing begins 66

Disciplinary and court processes and actions 67

Transitioning suspended licensees 67

3.3.5 Transitioning disqualified licensees and cancelled licences 67

Eligibility for those who initiated training before national licensing begins 67

Eligibility for those who completed training before national licensing begins 67

Lapsed licences 68

Current trainees for a restricted licence 68

Consultation 68

Impact analysis 69

Impact analysis 69

1.9 Transition and implementation costs of a national licensing system 69

Cost to plumbing and gasfitting licensees 69

Cost to business and consumers 70

Costs to government 70



1.10 Direct costs and benefits of national licensing 74

Labour mobility 74

Removal of multiple licences held across jurisdictions 77

Flexible licence periods 79

Licence tiers and qualification requirements 80

Reducing the costs of regulatory requirements 88

Costs imposed by new requirements 91

Business value-add 93

National Occupational Licensing Authority – ongoing operational costs 94

Potential changes in government revenue 95

Potential benefits to governments from simplified administrative arrangements 95

Other impacts that have not been quantified 98



1.11 Impact on consumer outcomes 103

Potential safety impacts 103

Consumer protection impacts 105

1.12 Comparing the impacts for licensees working in single and multiple jurisdictions 106

1.13 Wider economic impacts on the Australian economy 108

The shock to the model – the scenario modelled for this Regulatory Impact Statement 109

Key results 109

1.14 Sensitivity testing of key assumptions 113

Alternative licence period 113

Net present value assumptions 114

Cost and benefits of the automatic mutual recognition option 116

Summary of the costs and benefits of national licensing by jurisdiction 121

Consultation 129

Consultation 129

1.15 Public information sessions 129

1.16 Feedback on Consultation RIS and draft legislation 130

1.17 National Occupational Licensing Authority (NOLA) 130

1.18 Submission Summary 131

1.19 Overview of selected stakeholder positions 132

Conclusion and recommendation 135

Conclusion and recommendation 135

1.20 Recommendation 135

1.21 Overview of the proposed national licensing approach to the plumbing and gasfitting occupations 136

Licence categories 136

Scope of regulated work 136

Endorsements 139

Nominees 139

Exemptions 139

Non-skill-based eligibility requirements 140

Qualification-based eligibility requirements 142



OR 142

Plumbing and services – Operations stream elective 143

Common compulsory units: 143

Plumbing and services – Operation stream core 143

OR 143

Common compulsory units: 143

Plumbing and services – Operations stream electives: 143

PLUS 144

Completion of the unit of competency CPCPGS4023A Install, commission and service Type B gas appliances 144

Common compulsory units: 144

OR 146

Experience requirements 146

Additional testing 146

Licence period 146



Implementation 147

Implementation 147

1.22 Implementation of national licensing 147

1.23 Key steps in implementation 148

Notification of national licence(s) 148

Issuing of new national licence documentation 148

1.24 Communication strategy for national licensing 149

1.25 Review 150

Attachment A  Overview of the sector and existing licence requirements 151

Attachment A  Overview of the sector and existing licence requirements 151

Overview of the plumbing and gasfitting sector 151

Overview of the plumbing and gasfitting sector 151

Regulatory framework 153

Regulatory framework 153

Overview of existing licensing requirements 154

Overview of existing licensing requirements 154

Plumbing work 154

Water (supply) plumbing work 155

Sanitary plumbing 155

Drainage work 156

Fire protection 156

Mechanical services 156

Gasfitting 156

Gasfitting Type B 157

Attachment B – List of submissions 158

Attachment B – List of submissions 158

Attachment C – National licensing policy development process 182

Attachment C – National licensing policy development process 182

Attachment D – Risks associated with plumbing and gasfitting work 187

Attachment D – Risks associated with plumbing and gasfitting work 187

Sub-option 2 – How proposed Certificate IV units address risks 191

Sub-option 2 – How proposed Certificate IV units address risks 191

Attachment E – Key changes to existing jurisdictional licensing arrangements 197

Attachment E – Key changes to existing jurisdictional licensing arrangements 197

New South Wales 197

New South Wales 197

Victoria 203

Victoria 203

Queensland 210

Queensland 210

Western Australia 218

Western Australia 218

South Australia 224

South Australia 224

Tasmania 231

Tasmania 231

Australian Capital Territory 237

Australian Capital Territory 237

Northern Territory 243

Northern Territory 243

Comparison of Certificate IV – current and three tier approach 249

Comparison of Certificate IV – current and three tier approach 249

Plumber 249

Drainer 252

Fire protection 254

General gasfitter 254

Gasfitter Type B 257

Mechanical services 257

Attachment F – Regulated work – definition of terms 260

Attachment F – Regulated work – definition of terms 260

Attachment G – Approach to impact analysis 265

Attachment G – Approach to impact analysis 265

Approach to the impact analysis – calculations and method 265

Approach to the impact analysis – calculations and method 265

Calculations used in the cost–benefit analysis 265

Calculations used in the cost–benefit analysis 265

The status quo 265

Calculating the present value of yearly impacts 266

Method underlying the computable general equilibrium modelling 277

Method underlying the computable general equilibrium modelling 277

Overview of the modelling 277

Limitations of the modelling 279

The shock to the model 280

Calculating an increase in efficiency of labour in plumbing and gasfitting services 281

Calculating an increase in capital efficiency 281

Calculating a decrease in government fees 281

Calculating changes to government expenditure 281

Inputs and assumptions underlying the analysis 282

Assumptions in the cost–benefit analysis 282

Assumptions in the cost–benefit analysis 282

Real discount rate 282

Evaluation period 282

Wage rate 283

Industry growth rates (employment) 285

Licence fees 286

Number of licensees 291

Frequency of renewal of licence 294

Time cost of applying for a licence 296

Time cost of renewing a licence 297

Transition costs for industry 298

Government communication costs 299

National licensing register costs 299

Government operating costs associated with the licensing authority 301

Mutual recognition 304

Removal of requirement to hold multiple licences across jurisdictions 306

Experience requirements 307

Business value-add (capital efficiency) 308

Improved labour mobility 308

Changes to Certificate IV units 309

Duplicate testing in Victoria 313

Cost of introducing financial probity requirements 314

Removal of personal probity requirements for non-contractor licences 315

Removal of the requirement for apprentices to apply for a licence 319

Introducing worker licences in Queensland 319

Introducing contractor licences under national licensing 319

Providing evidence of skills maintenance 320

Attachment H – References 321

Attachment H – References 321

Reports and presentations 321

Reports and presentations 321

Legislation 323

Legislation 323


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