National Licensing for Property Occupations Consultation Regulation Impact Statement

Executive summary

Purpose of the Consultation Regulation Impact Statement

The purpose of this Consultation Regulation Impact Statement (RIS) is to seek stakeholder views on the policy underpinning the draft legislative schema for the establishment of a national licensing system for the property occupations, and in particular a response to the questions provided. The Consultation RIS also seeks stakeholder views on an automatic mutual recognition option.

This Consultation RIS examines the impact of replacing the current diverse state and territory licensing of the property occupational area with the proposed national licensing approach. It also examines an automatic mutual recognition option. It considers the impact that both options would have on industry, consumers and government. The Consultation RIS also acknowledges that the status quo would be the default option.

This Consultation RIS builds on previous consultation findings that were supportive of a national licensing system and subsequently endorsed by the Council of Australian Governments (COAG) through the signing of the Intergovernmental Agreement for a National Licensing System for Specified Occupations, passage of the Occupational Licensing National Law Act 2010 (National Law), establishment of the National Occupational Licensing Authority and appointment of the board. Accordingly national licensing is considered as the preferred option in the Consultation RIS. However, as previous consultation did not provide any cost–benefit analysis of an alternative automatic mutual recognition option, this Consultation RIS seeks stakeholder feedback on:

the preferred approach in light of fuller information on how both models would work and the potential costs and benefits of each option

the detailed proposal of how national licensing would be implemented, including seeking specific feedback on how this can be best achieved.

This executive summary provides a snapshot of the key features, rationale and costs and benefits for the following options:

national licensing (preferred option)

automatic mutual recognition.

The full overview of national licensing and the automatic mutual recognition model can be found in Chapter 3. Chapter 4 contains the impact analysis of national licensing and automatic mutual recognition, with quantification of impacts where possible. Implementation of the preferred national licensing option is discussed in Chapter 5. A summary of how the proposed arrangements compare to current jurisdictional licences is provided in Attachment B.

Stakeholder feedback

Stakeholder feedback is sought on the scope and scale of the proposed changes, examples of the impact on licensees and businesses, on the durability of reform, and on the merits of reform under the different models for promoting a seamless national approach to licensing of property occupations. For details on how to comment on the Consultation RIS and the closing date for submissions, see Attachment A.

Government objectives for reform

COAG has agreed to pursue wide-ranging regulatory reform in order to increase Australia’s productivity and provide the environment for a seamless national economy.

As part of these reforms, COAG has agreed to develop a National Occupational Licensing System (national licensing) for certain occupational areas. National licensing would allow licensees to perform regulated work anywhere in Australia while holding a national licence. This proposed system would replace current arrangements where each state and territory licenses an occupational area in a different way. A national licensing system would involve certain occupational and associated business licensing in the following initial occupational areas and would be introduced in two waves:

first wave: electrical; plumbing and gasfitting; property; refrigeration and air conditioning

second wave: building and building-related occupations; valuers and conveyancers.

The first-wave occupations are scheduled to commence licensing from 2013, and the second-wave occupations are anticipated to commence in 2014. National licensing would have the capacity to extend to other licensed occupations over time and provide a platform on which further harmonisation of state-based licensing arrangements, such as conduct requirements, could be considered.

The move to a national licensing system was initially agreed by COAG in the intergovernmental agreement signed in April 2009. Since then, arrangements for the national framework legislation (the National Law) have been implemented in most jurisdictions (New South Wales, Victoria, Queensland, South Australia, Tasmania and the Northern Territory) to establish the national licensing system.

Western Australia will consider its position on the passage of the Bill following the consultation period. The Australian Capital Territory has reserved its right not to implement national licensing if the costs to the Territory outweigh the benefits.

During the policy development process, it became clear that some amendments to the National Law will be required. The release of a draft Amendment Bill and draft regulations will coincide with the consultation period to allow for public comment to also occur on these.

A copy of the National Law can be found on the national licensing website (www.nola.gov.au).

Property occupations are important to the economy

The property industry in Australia includes a large number of property occupations, such as real estate agents, business agents, strata managers, property managers and auctioneers.¹ In 2011–12, the industry is expected to generate revenue of $9 billion, the majority of which is derived from residential sales (56.4 per cent), with revenue from residential property management and non-residential property sales being the next largest contributors.²

Based on information provided by jurisdictional regulators, there are over 126,000 property licensees across Australia, as shown in Table ES.1. Approximately 75 per cent of licences are issued in New South Wales, Victoria and Queensland.

Further information on the property industry is available in Attachment C.

Table ES.1: Number of existing licensees per jurisdiction and nationally, as of March 2012

Number of property licensees	NSW	Vic	Qld	WA	SA	Tas	ACT		NT	National
Total existing licensees	40,422	18,446	38,342	21,742	5,114	357	1,573	966			126,962
Percentage of national	32%	15%	30%	17%	4%	0.3%	1%	1%			100%

Note: These figures do not reflect the total property occupations’ workforce for some jurisdictions where some property occupations are not licensed (see Attachment E for an overview of current licensed categories).