Master Plumbers are calling for an urgent review of the fees charged to the industry by the regulator and have written to Building and Construction Minister Megan Woods asking for a review of the governance of the ‘very problematic’ plumbers board , gas fitters and drainlayers.
Master Plumbers chief executive Greg Wallace said in a letter sent to Woods earlier this month that plumbers pay “staggering” licensing fees that are 380% higher than comparable trades such as electricians.
Plumbers, gas fitters and drainlayers pay $600 a year to legally work in the industry, which covers licensing and a new credit card tax, while electricians pay $125 a year and carpenters $281 .11$.
Tradespeople who work only as plumbers pay $400 a year, which also includes credit card tax.
The license fee for one class of license (plumber, gasfitter or drainlayer) before the new increase in April of this year was $375.
Wallace said that for the past two fiscal years, the Plumbers, Gasfitters and Drains Board (PGDB) had recorded annual surpluses totaling $1.6 million.
The regulator had also reported total assets of more than $7.7 million, Wallace said, more than $1.3 million above the PGDB’s forecast.
PGDB’s annual report for the most recent fiscal year showed that it had accumulated $3.9 million in investments and had $1.5 million in cash and cash equivalents.
“Despite this,” the letter from the master plumbers states, “the Commission has approved an increase in license fees for 2022 and has also applied a credit card tax to practitioners who pay to renew their license. This fee is now fixed for three years, although it is evident that the latest fee modeling has significantly undervalued the number within the trade and therefore secured significantly more profit than originally anticipated by the board.
Wallace said there needs to be an urgent review of annual license fees to ensure they are appropriate and consistent with other fees in the construction industry.
The PDGB reviews its fee structure every three years, announcing in November 2021 that it will increase fees from April 1 this year.
The board said in its annual report that it was “very aware of the impact on practitioners and businesses in these difficult times with the disruptions of Covid-19”.
“Ultimately, the board considers these fee increases to be necessary to ensure financial viability.”
In a statement, PGDB chief executive Aleyna Hall said the board is making sure fees are as low as possible. She said the PGDB regulates a much smaller number of tradespeople than the Electrical Workers Registration Board (EWRB), and the PGDB receives no government funding and is funded entirely by industry, while that the EWRB receives funding from the government.
She said comparisons with the EWRB also had to take into account that the electricity regulator shared secretarial costs with the Department for Business, Innovation and Employment (MBIE) and that the PGDB didn’t.
Regarding the council’s financial situation, since the fee review, Hall said he had seen a 10% increase in licenses issued and an 18% increase in registration applications, while the number of trainees was also up in all three trades and expenses for the period were lower than expected.
Hall said the credit card surcharge is the fees charged by the various banks and is not retained by the PGDB.
Master Plumbers also took aim at the disciplinary dues its members pay to the council which covers the costs of investigating complaints against traders, as well as illegal work carried out by those not in the industry.
The disciplinary levy alone brought in $1.3 million to registered merchants in the fiscal year ending March 31, 2022.
Wallace said the annual report showed that of the 1,535 calls to the PGDB helpline, only 55 complaints were investigated, resulting in “only 37” disciplinary proceedings. successful cases against registered practitioners and six successful criminal cases against unlicensed consumers.
He said similar regulators charge “significantly” less than the PGDB for these functions.
Wallace told the minister that while there was “general approval” of the PGDB’s role, he said its composition and the way it carried out its work “continue to be highly problematic”.
But Hall said the PGDB has “a unique role in prosecuting unregistered and unlicensed people doing illegal work.”
“The Commission recognizes that plumbers, gas fitters and drainlayers are required to fund prosecutions of people who illegally carry out sanitary plumbing, gas connection and drainlaying work. Unlike masons and electricians, our practitioners receive no public funding for this function. The Council has approached the MBIE on several occasions to request funding for this function, most recently at the end of 2020, so that practitioners are not required to bear this cost. However, to date, the council has not been successful.
Hall said that in setting fees and levies, the PGDB follows the Auditor General’s good practice guidelines, charging fees for public sector goods and services, as well as Treasury guidelines.
The PGDB boss said the disciplinary levy is set every three years to fund ongoing disciplinary cases and the costs of future disciplinary cases as they arise.
These costs are difficult to budget for because there is uncertainty about how many complaints the council will receive and how many complaints will be forwarded to the hearing panel, Hall said.
The increase in the disciplinary contribution reflects the Board’s cautious approach to ensuring that there are sufficient funds to cover disciplinary costs for the next three years.
“This year we’re only halfway through and we’ve already seen a huge increase in complaints and lawsuits,” Hall said.
She said the number of complaints the council had received from April 1, 2022 had increased by 131%.
“We have 12 active lawsuits in the district court for unauthorized work, 11 of which are pending sentencing.”
Master Plumbers were concerned that there were fewer certified tradespeople appointed to the PGDB and said there were no apprentices appointed, “meaning the diversity of a younger voice is totally lacking”.
Wallace said that with a shortage of young people in the trade, it was imperative the council understood the needs of young plumbers. The minister makes appointments to the board.
The PGDB has a checkered history as a regulator, with lengthy legal battles over the fees it charges in particular, and its jurisdiction.
The disciplinary levy was ruled illegal by the Ombudsman in 2013 and legislation was introduced to retrospectively mitigate it.
Despite recommendations from the ombudsman asking council to consider returning some of the levy funds collected while illegal and license fee periods could be extended to avoid the appearance that the annual license was a revenue collection exercise, the PGDB did not bring any changes.
In 2010, the Auditor General surveyed the PGDB, finding problems with most board functions, questions about the legal basis for board policies and actions, and cited a closed and defensive culture and a sector characterized by suspicion. and discontent.
Hall said the PGDB appreciates the relationship he has with Master Plumbers.
“We recognize that our interests and those of the master plumbers will not always be aligned, but this is appropriate given our different roles within the industry.”
Minister Woods has been approached for comment. And there is the context of this story here.