Dris proposal for national licensing of the plumbing and gasfitting occupations

Removal of multiple licences held across jurisdictions

Under current licence requirements, licence holders must apply for a new licence if they wish to work in another state or territory. Initially, this involves both a time cost and the payment of additional licence fees. Under mutual recognition, a licence issued in one jurisdiction can be equivalent to a number of licences in another jurisdiction, with associated additional licence fees or costs for the applicant. Subsequently, that person would need to renew their licence(s) in the jurisdiction(s) in which they are held, again involving time and fees. This is the case even when mutual recognition of a licence is granted (i.e. when a regulator determines that the applicant has an equivalent licence). These costs would apply regardless of how effectively mutual recognition is operating.

A key benefit of national licensing would be the removal of the requirement for licence holders to hold more than one licence to work in multiple jurisdictions. It would also remove the need to apply for a new licence when they relocated, as long as that licence holder held a valid national licence.

In order to estimate this benefit for licensees, data provided by jurisdictional regulators has been used to estimate the proportion of licence holders in each jurisdiction who also hold a licence in other jurisdictions. Table 4.8 shows this data, which will pick up those licence holders who are transitioning from one jurisdiction to another and who may hold onto a second licence until it expires, as well as those who hold multiple licences over a long term (e.g. if they are working on a fly-in, fly out basis or live in a border region).

Table 4.8: Proportion of licence holders in each jurisdiction who also hold a licence in another jurisdiction

Percentage	NSW	VIC	QLD	WA	SA	TAS	ACT	NT
Existing licence holders	4%	2%	4%	12%	6%	12%	33%	10%

The reduction in cost associated with holding multiple licences can therefore be estimated by taking the total number of licence holders incurring the cost and estimating the avoided costs for these licence holders. This has been done using:

the number of licence holders who would be affected by the changes, which is estimated using the proportion of licence holders estimated as being required to hold more than one licence under current arrangements (as shown in Table 4.8)

data on plumbing and gasfitting licence fees in each jurisdiction and an estimate of the time to apply for a licence (which would be avoided costs).

It is important to note the potential for mutual recognition applications to be more onerous (in terms of time and documentation required) than standard applications. To reflect this, the time to apply for a licence is assumed to be higher under mutual recognition. See Attachment G for more detail on the approach to calculating this benefit and the assumptions underlying it.

Using this approach, it is estimated that the total cost of holding multiple licences is about $1.35 million per annum or $8.78 million NPV over ten years as at 1 July 2012. These costs would not be incurred under a national licensing approach. The distribution of this benefit across jurisdictions is shown in Table 4.9. Note that the benefits in this table have been attributed to the home state of licensees. For example, the benefit to New South Wales is the benefit to licensees who predominantly live in New South Wales but also hold licences in other jurisdictions. This attribution has been calculated based on migration flows. For further information on the assumptions underlying these estimates, see Attachment G.
Table 4.9: Benefit to licensees of no longer holding multiple licences across jurisdictions

$ million	NSW	VIC	QLD	WA	SA	TAS	ACT	NT	National
Annualised ongoing benefit	0.34	0.27	0.35	0.11	0.08	0.04	0.08	0.07	1.35
10-year NPV as at 1 July 2012	2.24	1.75	2.27	0.72	0.55	0.27	0.53	0.46	8.78

The impact on government

While removing the requirement to hold multiple licences delivers a direct benefit for licence holders, it represents a cost to government through reduced revenue (where there are fewer licences issued). Regulators would also be expected to realise some savings from a reduction in the number of licences issued, as they would no longer need to spend time processing those licences. It is noted that jurisdictional regulators will still incur the costs associated with compliance activities for licence holders who continue to work in their jurisdictions, but who are based (and pay their licence fee) in another jurisdiction but the converse would also be true, where licence holders paying a fee in one jurisdiction would perform work in other jurisdictions and therefore compliance costs would not be incurred for them. This impact may lead to a net cost for government, as the loss in revenue may be greater than the savings realised.

This cost is estimated to be about $0.82 million per annum (annualised across ten years) or $5.32 million NPV over ten years as at 1 July 2012. The distribution of this cost across jurisdictions is shown in Table 4.10.

Table 4.10: Impact on government from the removal of multiple licences across jurisdictions

$ million	NSW	VIC	QLD	WA	SA	TAS	ACT	NT	National
Annualised ongoing cost	0.39	0.05	0.13	0.06	0.07	0.02	0.10	0.002	0.82
10-year NPV as at 1 July 2012	2.55	0.32	0.83	0.37	0.48	0.12	0.65	0.01	5.32