Over 18 months ago, the Housing Industry Association (HIA) provided a submission to the Productivity Commission concerning the proposal to adopt a mutual recognition scheme to cover state and territory occupational licensing.
This initiative was the highly diluted substitute for the failure to extract the enormous benefit that would flow by the adoption of a singular national licensing system for targeted occupations particularly in the building and construction sector.
The HIA’s submission provides a fairly succinct outline of what might be expected when a logical concept to improve and provide consistent industry standards, boost quality performance and help strengthen consumer confidence in the building industry hits the roadblock of federal and state government agencies that seem to have a default setting to find any and every reason to do nothing.
This is what the HIA had to say in its submission:
“In 2006 the Council of Australian Governments (CoAG) reached agreement to achieve full mutual recognition of skills qualifications across Australia. The intention was for there to be more effective mutual recognition of electricians, plumbers, refrigeration and air-conditioning mechanics, carpenters, joiners and bricklayers. However, during the period between 2008 and 2013, rather than enhancing mutual recognition arrangements, it appears that CoAG focused its efforts on establishing a national occupational licensing system for selected occupations, including building trades. Whilst the principle of a nationally consistent licensing system was admirable, during the harmonization process, HIA became increasingly concerned with the red tape burden that would result in the event that jurisdictions resisted any reduction in their particular regulatory objectives. In December 2013, CoAG decided to discontinue the proposed reforms and instead announced that the States would work to develop alternative options.”
So after seven years of government dithering, it should come as no surprise that the HIA - whilst considering the ‘in principle’ objective of CoAG to implement a nationally consistent licensing system to be ‘admirable’ - then went on to express concern about the potential of a ‘red tape burden’ for their members if a new nationally consistent licensing regulation was pursued.
Whoever came up with that gem has probably watched too many episodes of "Yes Minister" where one of Sir Humphrey's backhanded compliments included the frequent use of the ‘most admirable’ descriptor. Government bureaucracies are the unchallenged experts within the field of systemic obfuscation. With that said, we must ask the obvious question: does maintaining the status quo and expanding it to include ‘mutual recognition’ actually represent a better licensing system that isn’t also drowning in a sea of mass confusion and increasing red tape anyway?
The HIA’s own submission appears to confirm this situation in stating that:
“In the meantime, there are some noticeable issues with the operation of the mutual recognition system for the residential building industry. These include:
The marked disparity in the licensing of builders and trade contractors from state to state
No two states have the same licensing or registration system, making it difficult to compare or marry up license classes. There is a marked disparity in the extent of business and occupational licensing amongst jurisdictions, with licensing of all builders and trade contractor’s mandatory in Queensland and South Australia whilst in some other jurisdiction, such as the Australian Capital Territory only residential builders are required to be licensed. For builders, there appear to be two main approaches taken by the states and territories in defining general building license categories in legislation. It should be noted that some states and territories have a combination of both approaches (e.g. South Australia). Some jurisdictions only require a license for certain kinds of building work e.g. New South Wales and Northern Territory, only require licenses for residential building (and not for commercial buildings). Some jurisdictions base license classes on the Building Code of Australia (BCA) to describe what work a license covers e.g. Queensland, Australian Capital Territory and Tasmania. Other jurisdictions align licenses to domestic/residential and/or industrial/commercial building (New South Wales, Victoria and South Australia). Western Australia issues a single open class of builder’s license which covers all work above $20,000 regardless of the type of building or the consumer/client.”
So the decision to stick with the multitude of state-based accreditations and a highly inconsistent approach to Australia’s builder licensing standards is seen as being the best option?
Surely we can develop a single, comprehensive and consistent approach to establish a standardized set of formal incremental qualifications based on the Australian Qualification Framework (AQF) outcomes. These qualifications could be linked to the issuance of various classes of a nationally recognised building licenses that correspond with different work categories to better recognise that the greater the complexity and scale of the construction project, then the greater level of skill and qualifications need to have be attained to obtain that license.
The Productivity Commission's Issues Paper called upon submissions to address specific matters including this rather interesting one:
Is there any evidence of jurisdiction ‘shopping and hopping’ occurring for occupations which is leading to harm to property, health and safety in another jurisdiction via mutual recognition? If so, what is the extent of the problem and is it a systemic issue affecting an entire occupation? Is there evidence of any benefits, such as regulatory competition and innovation between jurisdictions?
The HIA’s response to this question is predictable, but it does raise questions about how and who should be providing advice to government and agencies to make decisions upon.
“Anecdotally HIA is aware of allegations of forum shopping, where unsuccessful applicants move to another state or territory to obtain registration, where there are less onerous requirements (such as no need to sit a written exam) then re-apply in their original jurisdiction for registration utilizing mutual recognition. HIA agrees this conduct, when it occurs, subverts the intent of mutual recognition. All state licensing schemes have ‘fit and proper’ person requirements and HIA would recommend that a positive obligation be placed on applicants to declare whether or not they have applied for an equivalent license in another state as part of the registration. Importantly for HIA members, the majority of whom are first and foremost operating building or trade contracting businesses within their own distinct jurisdictional borders, the focus of any nationally coordinated approach should be to improve and simplify conditions (not increasing the stringency) for licensees.”
We can probably all agree there must be a focus to ‘improve’ upon the current mess. However, there should never be an objective to ‘simplify’ the measures that it takes to obtain a license to build if that simplification process involves a decrease to the already quite low quality standards of training and issuance of related occupational qualifications.
The private RTO fiasco that has operated freely over the past four years has already severely compromised training standards, including the training standards for persons who wish to be builders. The federal legislation passed in the last sitting week of Parliament is designed to curtail some of the more outlandish operators by restricting any access to federal funds.
That’s a very good corrective step, but one that took far too long to happen. Furthermore, these specific changes are unlikely to have any substantial impact on the operators who are basically ‘selling’ nationally recognised qualifications currently linked to licensing. And with the ‘mutual recognition’ provisions now in place, your next builder who ‘trained’ for as little as six weeks in one state and then got their license issued there could next year be working as a fully licensed builder on your project in your state. Good luck with that job!
It seems the advice that the Productivity Commission gave the government on mutual recognition didn’t seek to solve the central issue at all. Instead it just made it easier for rogue operators to spread their highly questionable talent around for all building consumers to suffer equally. What we ended up with is another government website advisory service which seems to be the fashion of late. Read some of the FAQs and see if you think it makes any sense in delivering consistent, high quality standards of builder licensing that Australian consumers will trust to be relied upon.
Shopping and hopping. An ‘admirable’ outcome indeed.