National Licensing for Property Occupations Consultation Regulation Impact Statement

Approaches to realising potential gains from reform

Background and progress

The Intergovernmental Agreement for a National Licensing System for Specified Occupations was signed in April 2009 Itauthorised the establishment of a national licensing body that would develop policy and administer the national licensing system. The agreement specifies arrangements for:

the appointment of a chief executive officer and a national licensing board

the establishment of occupational licence advisory committees as the principal source of advice on licence policy for the occupational areas

consultation with stakeholders to ensure that the national licensing board is able to provide authoritative advice to the Ministerial Council

the establishment of effective working relationships with jurisdictional regulators for each occupational area to promote effective coordination and to assist in the ongoing implementation of and issues associated with national licensing.

The passing of the National Law in 2010 enabled the establishment of the National Occupational Licensing Authority (licensing authority). In March 2012 the National Licensing Board was appointed, with Elizabeth Crouch as chair. (See Attachment D for full membership.) It has been agreed that the licensing authority will be established in Sydney.

While the considerable progress to date in establishing a national licensing system has been predicated on the national licensing option, feedback is also sought on the automatic mutual recognition option as an alternative approach to licensing reform.

Given that the automatic mutual recognition option (driver’s licence model) was not costed in the 2009 Decision RIS, it is considered prudent to revisit this model to determine whether it is a viable alternative. Accordingly, this Consultation RIS presents the advantages and limitations of an automatic mutual recognition option in this report (see Box ES.5), for further comment by industry stakeholders, government, consumers and the wider community.

This Consultation RIS, therefore, examines two broad approaches.

National licensing

A national licensing system would provide a single policy approach to licence categories, regulated work and the eligibility requirements to obtain property licences. 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 an additional fee. A national public register would be established.

Automatic mutual recognition

Under an automatic mutual recognition approach to national licensing, each jurisdiction would continue to issue licences against existing jurisdictional categories and associated scopes of work, but the majority of those licences (where a licence equivalency has been declared) would be recognised by every other state and territory without the licensee having to reapply for a licence or pay an additional fee.

Under both of these options, property licensees would need to meet the compliance requirements in the jurisdiction in which they work, but they would be free to choose where they work with no further licensing once the initial licence was obtained.

No licensing

An option involving the removal of all licensing requirements for property occupations has been ruled out on the basis of the likely adverse impact on consumer protection, and public and industry confidence. The majority of the work in the property sector is on behalf of a non-associated party. The work involves transactions relating to the sale, purchase, exchange, or leasing of real property. Often large sums of money can be exchanged or held in trust. Identified risks associated with this work include; theft of monies held in trust, acceptable appraisals of property, timely completion of sale or contracts. See Attachment F for further information on the risks associated with the property occupations.

Proposed areas of deregulation

There are number of examples of inconsistent regulatory requirements for property occupations across jurisdictions, and areas of regulation that do not have a strong rationale for inclusion. The COAG National Licensing Steering Committee identified 11 key areas as imposing unnecessary requirements on licence holders. These are:

licensing of non-residential property work

licensing of the sale, purchase and auctioning of livestock

licensing of trainee auctioneers (currently in Queensland)

registration of strata manager’s representatives (currently in New South Wales)

separate licence categories for buyer’s agents and stock and station agents (currently in New South Wales)

a separate licence category for property management (currently in New South Wales, Australian Capital Territory and Tasmania)

pastoral house licences (currently in Queensland)

licensing of residential (holiday) letting for periods under 90 days (currently in Queensland)

diploma qualification requirement for real estate agents

Certificate IV qualification requirement for an employee (agent’s representative)

mandatory continuing professional development (New South Wales, Western Australia, Tasmania and the Australian Capital Territory).

Jurisdictions also have different approaches to the imposition of licence conditions. In considering what conditions might be relevant in a national system, a number of redundant existing conditions have been identified.

The rationale for the areas of deregulation proposed under national licensing is discussed throughout Chapter 3. The chapter also seeks feedback on a ‘lighter approach’ registration scheme that could be used for some licence categories. In addition to these key areas, there are a range of other elements proposed for deregulation. These are presented in the context of the summary of existing and proposed licensing arrangements in Attachment B.

Further opportunities for deregulation

Licensing of certain categories of work

All jurisdictions currently license real estate agents. Business agency work is regulated in all jurisdictions through a separate licence category or captured in the scope of a real estate agent’s licence. Agent’s representatives are licensed in all jurisdictions except Tasmania. All jurisdictions license the auctioning of real property. In some cases this forms part of the scope of work for a real estate licence or is an endorsement on a real estate agent’s licence or stock and station agent’s licence if competency is demonstrated. In other cases a separate auctioneer’s licence is required. Not all jurisdictions require a licence for the auctioning of livestock. The licensing of strata managing agents occurs differently in the four jurisdictions that currently license them.

This Consultation RIS seeks stakeholder views on:

where an activity is broadly licensed or registered, whether the ‘lightest touch’ approach should be considered

for general features of licences (such as licence period), whether the least onerous approach could be considered.

Chapter 3 examines some situations where there may be opportunities for further deregulation of the property occupations.