A national licensing regime for four key construction trades would deliver net benefits of $260.1 million to the economy in Australia each year if preferred options are adopted, modelling by a federal government agency suggests.

In a newly released series of discussion papers, the National Occupation Licensing Authority (NOLA) outlines options for national recognition of licenses across the four areas considered ‘Wave 1’ occupations.

These include property, (excluding conveyancers and valuers), plumbing and gas fitting, refrigeration and air-conditioning and electrical. These occupations are the first of two ‘waves’ of trades for which for which national licensing will be implemented.

Momentum has been building for the national recognition of trade licenses since a Council of Australian Governments Meeting in 2008 in which state and federal governments agreed to work toward a harmonised system of trade licensing across the country.

Though specifics vary across the four aforementioned occupations, NOLA says the preferred option rests on creation of a national licensing model in which tradespeople across the various categories would need one licence which would allow them to work across Australia without having to apply for licences or pay fees in order to work interstate.

Under this approach, which NOLA says is preferable to alternatives such as keeping state based licensing regimes but allowing tradespeople to operate in different states without having to apply for licences in multiple locations, licences would be nationally consistent in terms of scope of work and would be based on a single set of national eligibility requirements.

The discussion papers say the current regime represents a haphazard approach under which inconsistent rules across different states limit the ability of tradespeople to work across borders and creates compliance nightmares for companies operating in multiple states.

annual economic benefits of national licensing scheme

In terms of refrigeration and air-conditioning for example, while all states require a Commonwealth ARCtick licence, three states license the refrigeration and air-conditioning as an occupation (Victoria, New South Wales and Queensland) whereas the others do not, and even among the three eastern states, the scope of these licences varies considerably.

Furthermore, while licensed tradespeople in one state have been allowed to perform broadly similar work in other states since states agreed to a principle of mutual recognition in 1992, they need to go through an application process in order to do this – a burdensome task for those who work across borders regularly and one which creates problems, for instance, when tradespeople such as plumbers and electricians are needed to respond to emergency situations.

All told, the four papers put the combined value of economic benefits of the national licensing model at $260.1 million, with benefits flowing through reduced compliance burdens on businesses and tradespeople, improved workforce participation and improved productivity through greater labour mobility.

COAG hopes arrangements for ‘Wave 1’ occupations will be finalised by the end of the year to commence in 2014, with consideration of ‘Wave 2’ occupations (building occupations, conveyancers and valuers) set to follow afterward.