National Licensing for Property Occupations Consultation Regulation Impact Statement

Mutual recognition

Currently, occupational licence, registration or accreditation holders are able to work across jurisdictions under the Mutual Recognition Agreement, to which all states and territories are signatories. Under the Mutual Recognition Act 1992, occupational licence holders from one jurisdiction can apply to be registered in a second jurisdiction on the basis of their existing licence and without further assessment of their skills. However, licence holders must still approach the regulator in each jurisdiction they wish to work in, prove they are licensed in another jurisdiction, and pay a fee to receive an equivalent licence for that jurisdiction. This process imposes financial costs and time delays, and may impede short-term interstate service provision.

Mutual recognition applies to all licensed occupations, including the four occupations in the initial tranche of the national licensing reform (electrical, plumbing and gasfitting, property, and refrigeration and air conditioning). Other covered occupations include builders and building-related occupations, conveyancers, valuers, driving instructors, pilots, escort vehicle drivers, maritime occupations, pest and weed controllers, gaming occupations and pyrotechnicians. Mutual recognition does not apply to licensed corporations or similar entities.

Ministerial declarations for the occupations mentioned above were made under section 32 of the Mutual Recognition Act 1992. These declarations contain matrices that describe occupational licence equivalents across all jurisdictions. An excerpt from the restricted property licences mutual recognition matrix contained in the Commonwealth of Australia Gazette 2007 is in Table 2.2. The table sets out the licence equivalence mapping of a NSW real estate agent’s licence. The codes contained in the cells are restrictions applied to grant equivalence, and an explanation of these can be found below Table 2.2. This example also illustrates the complexity involved in preparing and maintaining mutual recognition matrices. The full suite of the ministerial declaration matrices can be accessed on the Australian Government’s Licence Recognition website. The website also allows a licensee to search for the equivalent licence in another jurisdiction.

Table 2.2: Licence equivalence mapping of a NSW real estate agent’s licence in other jurisdictions

First Jurisdiction	Second Jurisdiction
	NSW		Vic		Qld	WA	SA	Tas	ACT	NT
NSW
Real Estate Agent’s Licence			Estate Agent Licence Restricted to B – OT, RE, RR R – OT, RE, RR S – OT, RE, RR		Property Agents and Motor Dealers Licence (Real Estate Agent)	Real Estate and Business Agents Licence Excluding B – BU R – BU S – BU	Land Agent Registration	Registration as Real Estate Agent Restricted to B – OT, RE, RR R – OT, RE, RR S – OT, RE, RR	Real Estate Agent Licence	Real Estate Agent’s Licence Excluding SM – OT, RE, RR
Codes for restrictions or exclusions:
Functions				Asset type
B		BU		Businesses
R		OT		Other Real Estate
S		RE		Residential Real Estate
SM		RR		Rural Real Estate

The Productivity Commission reviewed mutual recognition in 2003, and again in 2009. The commission found in both reports that on the whole, mutual recognition had reduced impediments to labour mobility. In particular, it found that ‘mutual recognition appears to be associated with a modest increase in the number of interstate arrivals in registered occupations compared with other occupations’.⁷ However, in both reports, the commission identified problems with the day-to-day operation of mutual recognition, such as the equivalence of occupations, registrations coverage and the expertise of regulators.⁸ In cases where regulators do not apply mutual recognition correctly, complications can be created when conditions and restrictions are placed on licensees when they move across jurisdictions. Both reports made recommendations for improvements.

The Productivity Commission supported the development of nationally uniform licensing requirements and national registration systems for occupations that were highly mobile across jurisdictions, where licence requirements between jurisdictions were significantly different, and where the benefits would justify the costs.

In 2008, the Allen Consulting Group⁹ undertook a follow-up review of changes made following the Productivity Commission report. It found evidence that mutual recognition had reduced regulatory burdens on licensees and some evidence that mutual recognition had reduced barriers to mobility from licence differences. It also found a strong view in industry that labour shortages were due less to low mobility than to overall skills shortages nationwide. A bigger issue identified was the high cost of holding multiple licences, due to application and renewal fees. The review also identified a continuum of licensing models, from the current mutual recognition arrangements through to national licensing, including ‘enhanced mutual recognition’ (or ‘driver’s licence model’).