Trade Registration Update
The Victorian Government has been in the process of introducing a registration and licensing of trades system for almost three years.
Even though legislation passed in 2018, recently a new Bill amending many of the requirements to the proposed system is now back before Parliament. This is before the system of trade registration and licensing has commenced.
HIA has had concerns about a number of the original proposals and been lobbying for a better outcome for trade registration and licensing. The proposed changes appear to have come from industry and stakeholder responses to an Options Paper from last year, where the HIA identified many improvements to be made.
What is the most significant change?
The Government’s original proposal required trades who wanted to work as subcontractors to become registered building practitioners. This meant that these trades would have needed to become at least a registered Domestic Builder – Limited (DB-L).
This would have required a trade to satisfy all the requirements that applied to builders who worked for consumers, including obtaining eligibility for Domestic Building Insurance (DBI) (formerly Home Owners Warranty Insurance) and the skills and experience to be able to obtain building permits and sign contracts with consumers.
HIA’s view is that these requirements make no sense for trades who work solely for builders. There are no increased benefits for consumers – as the builder is responsible for all elements of the project.
New building registration proposal – Registered Builder Subcontractor
The new Bill proposes a new type of building registration called the ‘Registered Builder Subcontractor’. This registration would not include the need for a trade to obtain DBI eligibility. It seems a trade with this registration could only work as a subcontractor or employee for registered builders or undertake small jobs for consumers where the value of the works is $10,000 or less.
HIA also expects this new registration proposal to have lower qualifications requirements than the Domestic Builder – Limited registration category.
The changes are an acknowledgement that the original registration of trades system was impractical for trades who work as subcontractors for builders.
At this stage there doesn’t appear to be changes intended to Domestic Builder Unlimited (DB-U) and Domestic Builder Limited (DB-L) registration categories. But the HIA will keep an eye out for this as it may change as the government finalises the regulations and details of the proposed system.
What do I need to do now?
There is no action required from builders and trades just yet. The Bill would still needs to be passed by the Victorian Parliament. Regulations then need to be made after a public consultation process.
That said, if a trade wants greater certainty or is interested in progressing their career towards working as a builder, then they could consider applying to become a DB-L or DB-U now. It is clear that a trade who holds registration such as a DB-L will be able to work as a subcontractor and will be better placed than a Registered Builder Subcontractor to become a builder in the future.
So, with all this, the registration and licensing system is unlikely to commence until sometime in mid to late 2022. The Government has previously said that carpenters will be the first trade to be subject to the new registration and licensing system. HIA will keep members up to date with all the requirements and the next steps as the Government moves forward with these proposals.