By John Sutton, former board member of the National Occupational Licensing Authority
26 February 2014 — The move to create a national licensing scheme for occupations such as in real estate building and construction has already cost $30 million in taxpayer funds and was supported by the Business Council, Australian Industry Group, the Australian Council of Trade Unions and the Productivity Commission. Yet, even as the clamour-call for greater productivity continues to grow in Canberra, the Liberal-government dominated Council of Australian Governments has tossed this investment down the drain. Instead we have the same old national mish-mash that has given us sometimes wildly different standards in real estate agency, education, medicine and environmental house rating systems, among other crazy anomalies, says John Sutton.
An important long-term national productivity initiative bit the dust with little public awareness, just as Australians went off on their Christmas break. The project, to achieve national licensing for trades and occupations, was first advanced by the Howard government in 2006 and then progressed by the Rudd and Gillard governments before being suddenly killed off in the early days of the Abbott government.
The initiative involved taking occupational licensing from being the preserve of 27 discrete regulators spread across the eight state and territory governments and bringing it under one national authority.
The aim was to rationalise licence categories and create consistency within the same occupations across the country. Not only was this important for the various occupations concerned, it was also highly relevant for training authorities that at present deal with thousands of different licensing categories and scopes of work in training tradespeople and professionals of the future.
Peak industry bodies including the Business Council, Australian Industry Group and the Australian Council of Trade Unions have consistently supported national licensing.
No less than three separate Productivity Commission reports in 2003, 2006 and 2013 advanced strong economic cases for national licensing. They even quantified the national benefit as being up to 0.3 of a percentage point to baseline GDP.
At a practical level national licensing is about tradespersons and businesses not being required to hold multiple licenses, particularly when they work interstate or in the case of Albury or Tweed Heads workers, across the road. As fly-in fly-out and labour mobility becomes a bigger issue for the workforce, the business case for national licensing is a “no brainer”.
Yet the Council of Australian Governments at its December meeting decided that it was “too hard” and junked national licensing. In doing so, our leaders simply wasted around $30 million of taxpayers’ money used to develop the national licensing system, a state of the art licensing register and a fully functioning National Occupational Licensing Authority.
With little evident justification, COAG cast aside years of work, particularly in relation to the first wave of occupations covering electricians, plumbers, airconditioning mechanics and real estate agents.
How long can we justify requiring an estimated one third of licensees to hold multiple licences and pay multiple licence fees? Why should skilled tradespeople and small business incur delays and extra cost when they want to work outside their home state?
Why are the rules and requirements of individual occupations different, with often obscure anomalies, across the eight jurisdictions? And perhaps most importantly of all, why can’t consumers and businesses have immediate, online access to a national database informing them of the bona fides of purported licensees.
So how was it that national licensing was proceeding full steam ahead six months ago but was shut down by Christmas?
Collaboration for the wrong reasons
In short an unlikely unity ticket between those who wanted no change and those who wanted maximum, rapid change, won the day and killed off the steady progress option.
In the two years of NOLA’s existence the authority worked closely with key stakeholders from business, the unions and state-based regulators to find workable, digestible changes in the four initial occupations that were capable of being implemented nationally.
A great deal of patient work was required and considerable good will generated towards NOLA and national licensing. Granted, a minority of voices were against any change. Some regulators perceived a threat to their functions and control, while one particular industry group was anxious to hold on to its mandatory professional development courses, which generated considerable revenue.
After much careful groundwork the new national rules for the first four occupations were drafted into an initial regulatory impact statement and then after further exhaustive consultation a Decision RIS was released.
Those who bear responsibility and hold decision-making power under the COAG architecture are the states and in this instance the decision makers were state-based Treasury officials.
As is so often the case with economic boffins in their wisdom they decided to turn their back on NOLA’s exhaustive industry consultations and instead produced a final package that was dramatic in the quick economic dividends it would realise, but completely incapable of winning industry acceptance.
The upshot of the RIS process was outright hostility from industry, a feeling of betrayal from many key stakeholders and a sudden distaste for the whole notion of national licensing.
So after three Productivity Commission reports, eight years of effort and $30 million of expenditure, it’s back to square one.
The state governments that were most prominent in killing off national licensing have come up with a fig leaf called Automatic Mutual Recognition, designed to mask the fact that they have not progressed this important national reform. With little expectation that this will work it is likely that this “alternative” will be shelved by the Council for the Australian Federation, which has now been handballed the issue.
It’s enough to make those interested in national progress and seamless economic regulation weep. How is it that the European Union with around 400 million citizens is implementing one set of comprehensive economic rules across national borders but Australia with 22 million people seems destined to hang onto a patchwork of eight different sets of rules? How did we ever achieve a uniform national rail gauge?
John Sutton has been a member of the NOLA board for the last two years and is a former Vice- President of the ACTU.
The National Occupational Licensing Authority website says the authority is “in the process of being disestablished” and that states will work with the Council for the Australian Federation [a body of states without federal government inclusion] to develop alternative options to national licensing.