Submission on

Easy an d Transparent Trading

Consultation Paper (NSW)

Aug 2018

Easy and Transparent Trading Consultation Paper Regulatory Policy, BRD Department of Finance, Services and Innovation Level 5, McKell Building 2-24 Rawson Place SYDNEY NSW 2000 Email: policy@finance.nsw.gov.au ABOUT SPASA

The Swimming Pool and Spa Association of Australia (SPASA) is the peak industry body representing the interests of the swimming pool and spa industry. As the voice of the industry, SPASA represents pool builders, manufacturers, suppliers, retailers, technical servicemen, subcontractors, installers, consultants and other allied trades, all of whom set themselves apart from the rest of the industry by setting standards of skill, workmanship and ethical business behaviour in the best interests of pool and spa owners. SPASA is also a Registered Training Organisation (RTO) that provides training and assessment to the swimming pool and spa industry. Our courses are designed in consultation with key industry stakeholders and our qualifications and accreditations are highly valued by government, employers and the wider community. The Swimming Pool and Spa Industry is diverse and includes but is not limited to the following sectors:

Manufacturers of Equipment & Chemicals Suppliers of Equipment & Chemicals

Pool Builders Pool and Spa Service Technicians

Pool Shops Consultants

Online Retailers Portable Spa Retailers

Prefabricated Pool Manufacturers & Retailers Tiling/Paving Suppliers & Retailers

Pool & Spa Heating Manufacturers/ Retailers Pool Cover Manufacturers & Retailers

Ancillary Retailers Other Sub Trades

LACK OF NOTIFICATION OF CONSULTATION

SPASA was only made aware of this consultation by another key stakeholder who themselves was made aware by another.

Additionally, the title of the consultation paper – “Easy and Transparent Trading - Empowering Consumers and Small Business” does not properly reflect the contents of the consultation paper. For many, it would be easy to assume that the consultation paper does not relate to them on first reading, resulting in some stakeholders not responding.

Effective industry consultation and engagement is central to the development of ‘good governance and policy’. To enable ‘good governance and policy’ it is encumbered on government and regulators to inform industry, seek input and stimulate debate. This process helps achieve effective and responsive decision-making and assists government to meet policy, planning, leadership and advocacy objectives and outcomes. The lack of notification is unfortunate. Consequently, SPASA’s submission has been drafted under time pressure whilst working on other planned projects. Comments are only made to areas considered relevant.

mailto:policy@finance.nsw.gov.auhttps://www.fairtrading.nsw.gov.au/__data/assets/pdf_file/0004/388138/Easy_and_transparent_trading_Consultation_Paper.pdfhttps://www.fairtrading.nsw.gov.au/__data/assets/pdf_file/0004/388138/Easy_and_transparent_trading_Consultation_Paper.pdf

INTRODUCTION

The swimming pool and spa industry in NSW is directly affected by the operation of occupational and business licensing requirements.

SPASA’s position is to support the operation of an appropriate licensing framework for the swimming pool and spa and broader industries. The ultimate key is for the framework to be set at a reasonable level to achieve the intended consumer and safety outcomes and avoid risks associated with 'unqualified' persons or organisations undertaking work.

Licensing should minimise risks by ensuring that people who perform work which is critical to safety have as a minimum achieved a certain standard of technical skills. When any building or associated work is done badly then it has the potential to cause significant harm to people and/or costs to property.

In considering the effects of red tape on licensing there is, in SPASA’s view, a need to rethink the concept that by removing licensing that it will result in the positive removal of red tape.

Whilst this may be the case in some instances, it can never be acceptable in situations where licensing relates to work which is critical to marinating and improving safety outcomes in and around swimming pools and spa environments.

1.1 Extending licence durations

It is proposed to provide individuals with the option to renew their licence for one, three, or five-year periods across all licence types.

SPASA SUPPORTS option 2.

1.2 Extending licence restoration periods

If an individual does not renew on time or their licence expires, they may have to pay a restoration fee and reapply (generally within 3 months). If an individual does not restore their licence in the three-month period there may be lengthy delays via an inconsistent process.

SPASA SUPPORTS option 2 which will ensure consistency between licence categories and encourage licensees to promptly apply for a licence restoration.

Q1. What option should be pursued?

Options for Reform

1. Maintaining the status quo × 2. Extend licence durations for temporal licences ✓

Q3. What option should be pursued?

Options for Reform 1. Maintaining the status quo × 2. Provide a consistent three-month restoration period, with the Commissioner

having the discretion to extend the restoration period, in exceptional circumstances ✓

1.3 Increase the threshold for an owner builder permit

Owners can do building work on their home if the value of the labour and materials is less than $10,000. Where the market value of the building work is more than $10,000, the home owner must apply for an ‘owner-builder’ permit.

Proposal is to increase the value threshold of the owner-builder permit to $20,000.

SPASA DOES NOT SUPPORT raising the value of the threshold for requiring an owner-builder permit from $10,000 to $20,000.

In addition, the current requirements for a home owner to obtain an owner-builder permit is insufficient. Our experience is that owner builders lack a real understanding in the following areas:

• Being able to understand the plans for the proposed work • Obtaining the required insurances, e.g. workers compensation, public liability etc. • The need to ensure any contractor engaged is appropriately licensed and insured • Arranging for required inspections during the building stages. • Overseeing and supervising all tradespeople • Ensuring that all relevant laws are complied with • Providing a safe work environment • Comply with any work cover requirements and Occupational Health and Safety • Technical ability to direct and assess workmanship • Sequencing of work

The current owner-builder process fast tracks what is for contractors a heavily regulated industry, especially where such property can be on-sold to subsequent purchasers. The Home Building Act on the one hand places a peripheral degree of responsibility on owner-builders for their projects, however on the other hand, owner-builders are recognised as consumers whereas subcontractors are required to provide home warranty insurance to the owner-builder.

SPASA holds strong views that owner-builder permits should be removed entirely.

Notwithstanding, it is not unreasonable to expect that where any person takes on the role of an owner–builder they should be made to engage a licenced pool builder or building surveyor in an advisory capacity as well as the project being subject to additional inspections at critical stages.

As per above response. SPASA DOES NOT SUPPORT raising the value of the threshold for requiring an owner-builder permit from $10,000 to $20,000.

SPASA’s preferred position is that owner-builder permits should be removed entirely or that the training component should be significantly increased alongside a requirement to have a licensed pool builder or building surveyor engaged in an advisory capacity throughout the project.

Q5. Where should the financial threshold for an owner-builder permit in NSW be set?

Options for Reform

1. Maintain the status quo ✓ 2. Increasing the value threshold of the owner-builder permit to $20,000 ×

Q6. What should be considered when setting the threshold for an owner-builder permit?

1.6 Removing 13 categories of home building licences

List of licences proposed to be removed: Decorating Paving

Painting Shower screen installation

Fencing Ducting/mechanical ventilation

Glazing Shade sails and shade systems installation

Kitchen and Bathroom Benchtop Installation Dry Plastering

Splashback installation Wet Plastering

Minor Maintenance/Cleaning

Fencing & Glazing SPASA DOES NOT SUPPORT the removal of “Fencing” and “Glazing” when associated with pool and spa barriers.

Lifting compliance with pool and spa barriers is critical to the safety of a swimming pool and spa environment. The Independent Review of Swimming Pool Regulation Final Report – November 2015

completed by Michael Lambert stated:

9.1.5 Training and accountability of pool barrier installers

“Under the current licensing rules of the Home Building Services Act, persons installing fences do not need a license if the value of the work is $5000 or less. Previously this was $1000. The increase in the value threshold means that a substantial number of persons installing pool barriers are not licensed and there is no regulatory mechanism to ensure that they install pool barriers in line with the standard or have the requisite training and skills. From discussions with council inspectors it would appear that a significant number of persons installing pool barriers are not aware of the regulatory requirements and standards. This reflects in pool barriers being installed for new pools which are non-compliant and need to be corrected before they can be certified.” Consequently, some homeowners who genuinely wish to comply sadly become victims of non-complying pool and spa barriers through no fault of their own. On one hand, the government’s policy position is to lift compliance through the pool barrier inspection program whilst on the other hand the same government is entertaining the removal of licensing of the very thing that requires the inspection program to succeed. SPASA submits that consumer safety is best protected by qualified individuals holding appropriate qualifications and licensing.

Q11. Do you support the removal of the above 13 licence categories? If not, which do you believe need to be retained and why?

Options for Reform

1. Maintain the status quo ✓ 2. Remove the requirement to hold a licence for the above 13 categories ×

https://www.olg.nsw.gov.au/sites/default/files/OLG%20-%20Lambert%20Swimming%20Pool%20Review%202015%20-%20Final%20Report.pdf#_blank

Paving SPASA DOES NOT SUPPORT the removal of the “Paving” licensing category. Paving around a swimming pool and/or spa is an essential finishing trade and one that continues to have many problems that affect pool builders, builders and homeowners. The current accepted licensing pathway is the completion of CPC31611/ CPC31608 Certificate III in Paving. To achieve this qualification, students must demonstrate competency in: 21 units of competency (made up of 18 core units & 3 elective units).

Removing licensing removes the pre-requisite for the qualification thereby removing the requirement for someone to be trained. This can only result in an increase in the already existing problems relating to paving defects and disputes. 1.8 Allowing licence holders to trade out of external administration

The proposal is to allow corporations to trade out of administration, but help prevent the practice of ‘phoenixing’, where individuals strategically allow their corporation to go into administration, only to re-commence trading with a new corporation soon afterwards. This would allow Fair Trading to amend laws relating to mandatory cancelling of licences.

SPASA SUPPORTS option 2.

On face value, SPASA SUPPORTS the proposed amendment “Amend the requirement in Fair Trading laws relating to the mandatory cancellation of licences” but would be eager to review the detail before commenting further.

Q15. Should the cancellation of an individual and/or corporation licence due to external administration be mandatory? Why? Options for Reform 1. Maintain the status quo × 2. Amend the requirement in Fair Trading laws relating to the mandatory cancellation

of licences✓

Q16. Are there any alternative options that would more effectively address this issue?

1.13 AMR – Architects and other building related occupations

Automatic Mutual Recognition (AMR) allows an occupational licence holder in one jurisdiction to practice their occupation in another jurisdiction, without the need to apply for licence recognition. In effect, it allows a practitioner to work across the country with only one licence. AMR schemes are currently in place for electricians in the eastern states of Australia, and for veterinarians in all Australian states except for Western Australia. These schemes were motivated by concerns to reduce unnecessary regulative and duplicative burdens, especially in border areas, and to assist in recovery efforts following major natural disasters.

SPASA SUPPORTS an extension of automatic Mutual Recognition for architects and other building occupations.

1.15 Review of Continuing Professional Development (CPD) requirements

The Innovation and Better Regulation Portfolio currently has inconsistent CPD requirements across the licence regimes. Not every category of licence is required to undertake CPD, and the categories of licence that are required to undertake CPD as a condition of their licence are subject to varying annual requirements (from 5 points to 15 points). The final report of the IPART Review of Licensing in NSW also recommended that an independent overarching review of CPD requirements across Government should be undertaken.

Note: CPD Commentary based on the Building Industry The CPD system was created to change the culture in the home building industry. The intention or spirit of the CPD system was to allow license holders the opportunity to formally and easily learn about their industry and related skills. Moreover, the CPD points system allowed license holders to stay informed and up to date with current practices. SPASA is a strong advocate for license holders to continue learning via the current CPD system and believes it can be approved in the following ways: CPD Topics Currently, license holders can undertake any one of the 8 topics in the guidelines and obtain up to 12 CPD points in that topic alone. Moreover, topics in the guidelines relevant to the class of license can be avoided altogether. By way of example, a builder can earn up to 12 points by attending seminar on “Effective Tendering Techniques” even though it has nothing to do with what they do in the field.

Q25. Which other licence categories administered by Fair Trading or SafeWork would Automatic Mutual Recognition be of most value? 1. Maintain the status quo × 2. Introduce Automatic Mutual Recognition for architects and other building

occupations ✓

Q26. What issues should be considered in the proposed review of CPD arrangements?

Although an isolated and specific topic may be important, SPASA does not believe that obtaining points in this manner provides the intended benefit to the licence holder, industry and the consumer.

SPASA strongly believes that it would be more beneficial to have license holders achieve a proper spread of CPD point activities across the entire topics listed in the guidelines to make up the required 12 points.

Possible Solution: A builder would need to obtain 12 CPD points that are relevant across 6 of the topics listed in the guidelines and at least 8 CPD points would need to be achieved via a face to face activity.

Mandatory CPD Topic

A dedicated Dispute Resolution “Continual Professional development” (CPD) topic could be made mandatory as part of the CPD Scheme and could cover:

▪ Introduction to building and construction contracts ▪ Building and Construction Industry Security of Payment Act ▪ Court Processes ▪ Non-court processes ▪ Common building and construction disputes ▪ Timing and sequencing issues ▪ Liquidated and other damages ▪ Termination breaches and events ▪ Contractual remedies ▪ Negotiation ▪ Communication

Benefits of a mandatory Dispute Resolution CPD Training include:

▪ Disputes being dealt with quickly ▪ Overall less costly form of settling disputes. ▪ Compliance/risk avoidance mechanisms (better education) ▪ Encouraging license holders to develop dispute resolution strategies ▪ May allow for more creative remedies and outcomes compared with alternative ▪ Support approach which relies on consensus.

Surplus CPD Points

Currently, license holders can accumulate and carry forward up to 11 surplus CPD points for 12 months.

SPASA is of the view that the accumulation of up to 11 points does not promote current and regular updating of skills and knowledge and this practice of accumulating points should cease. CPD License Categories - Expansion SPASA strongly SUPPORTS the CPD system being expanded across all license categories. Trades not only work with consumers directly but also sub-contract with license holders. In this regard, SPASA sees their omission from the CPD system as an unnecessary risk and there can be no justification not to require them to obtain CPD. Builders and Swimming Pool Builders alike currently require 12 points to be achieved every 12 months to maintain their licences. The real concern is that the Subcontractors that they may employ are not required to attain 12 CPD points annually to maintain their license. Their exclusion may in fact reduce the effectiveness in what the CPD system was initially intended to do.

General Comments on CPD SPASA believes there is a real necessity to encourage all of industry to come together and expand on what is an excellent base CPD platform. The current CPD system can be improved to deliver a more effective, relevant and more balanced learning scheme which would provide better comfort and confidence across industry, regulators and consumers.

Yes.

2.1 Notice of key terms in a consumer contract

Everyday experience indicates that consumers do not always fully inform themselves of the terms and conditions on which they transact.

SPASA DOES NOT AGREE that this issue needs to be addressed in Construction / Building Contracts. SPASA submits that industry approved building contracts are already sufficiently clear, written in plain English and are provided to the consumer together with the NSW Fair Trading Building Guide. Additionally, more than ever before, the modern consumer now has access to unlimited resources both online and through other channels to obtain both paid and free resources and information.

Q28. Do you agree that this issue needs to be addressed? If so, what key information should be disclosed to consumers in a contract? Options for Reform 1. An awareness campaign to encourage consumers to read the terms and conditions

on consumer contracts. × 2. Creating a duty on traders not to take advantage of consumer ignorance arising

from consumers not understanding terms and conditions. × 3. Requiring product disclosure statements in more industries. × 4. Requiring traders to provide clear, upfront, explicit notice of terms that may

substantially prejudice a consumer’s interests, with those terms listed in statute. × 5. Requiring traders to provide clear, upfront, explicit notice of terms that may

substantially prejudice a consumer’s interests, with a list of examples to provide more clarity as to the meaning of “substantially prejudice”. ×

No Option Chosen

Q27. Should a review of CPD requirements be undertaken across the whole of the NSW Government first rather than commence in the Innovation and Better Regulation portfolio?

As per above, SPASA DOES NOT AGREE that this issue needs to be addressed in Construction / Building Contracts.

2.6 Publish Data on Traders and Licensees (online portal of registers)

SPASA SUPPORTS the information below be consistent and freely available:

▪ name of the licence holder ▪ licence number and licence class or type ▪ date of issue and current expiry date of the licence (if any) ▪ details of any surrender, cancellation or suspension of the licence ▪ details of any licence conditions (if any) ▪ details of successful enforcement and administrative action including disciplinary

action, and the issue of Penalty Infringement Notices, rectification orders, and NCAT orders issued in connection with the licence (if any)

▪ results of any successful prosecutions against the licence holder under the WHS Act, the Fair-Trading Act or the ACL (if any)

▪ Up to date Home Building Compensation Fund information Making records of complaints or misconduct publicly available where the company or individual has since demonstrated themselves to have rectified or improved their performance.

SPASA SUPPORTS a simple, clear and timely process allowing “Traders” to challenge and make appropriate enquiries regarding items listed on the online portal under their license.

In principal, SPASA SUPPORTS Option 3.

Q29. What would be appropriate remedies for non-compliance?

Q36. What information should consumers be able to publicly access about a trader online?

Q37. What information should be kept confidential?

Q38. What factors should be considered in developing this proposal?

Q39. Do you agree with option 3? Options for Reform 1. Maintaining the current status quo × 2. Incremental changes to the public registers × 3. Establish an on-line portal for centralised access to information and ensure

consistency of information across all licensing regimes ✓

INDUSTRY NOTE: RED TAPE - Non- Payment to Builders Prompt payment is an important issue for pool builders and other contractors, as delays in payment and non-payment can have a dramatic impact on the financial viability of a business and their associated industries. Pool Builders like other contractors are placed in significant risk positions daily, when they rely on the final payment from the homeowner to cover expenses and make a profit. SPASA and other respected associations do not support bad behaviour or practices by builders and contractors that negatively impact homeowners, but we do support and advocate for decent hard-working builders and contractors being paid for good work they undertake and complete. Many of our members work directly for homeowners that undertake pool and spa construction work, renovations, repairs and servicing. Feedback from these members highlights that non-payment from homeowners is a major issue which has significant flow on effects to their subcontractors, suppliers and to their business. Whilst the Home Building Compensation Fund (HBCF) is part of a comprehensive consumer protection regime for homeowners, a prominent major cause of builder financial stress and insolvency is non-payment by homeowners for works carried out. In stark contrast to a homeowner’s consumer rights, the means to recover progress claims from homeowners by contractors is expensive, time consuming and riddled with red-tape. NCAT orders against a builder who does not perform can lead to license suspension and HBCF restrictions whilst NCAT orders against consumers who do not perform requires the builder to invest in legal actions that protract the matter and can cost as much or more as the order they are pursuing…..Extraordinarily, the builder is then interrogated by HBCF as to why the amounts remain outstanding and asked to provide a detailed explanation as to why/how the legal costs accumulated. Ironically, the very thing that is required from a builder by HBCF (financial stability/viability) is the very thing that will negatively affect their eligibility by spending a significant amount of time chasing progress claim payments they are entitled to – alone and with no regulatory assistance. SPASA submits that the Security of Payments Act or some other similar mechanism needs to be also geared to include residential building works contracted directly with the

homeowner to protect the builder…………………This would ensure that the balance of power between the homeowner and the contractors is in fact - Balanced.

For further information: Spiros Dassakis - COO Swimming Pool and Spa Association of Australia (SPASA) Toll Free: 1800 802 482 Phone: (02) 9630 6300 Email: info@spasa.com.au Website: www.spasa.com.au

mailto:info@spasa.com.auhttp://www.spasa.com.au/