What Are Some Unintended Consequences Of A Stricter Plumber Licensing Regime?

The Plumbers, Drainlayers & Gasfitters board presides over a shiny new licensing system that seems to be copied from other professional guilds. On top of licensing fees, a system of “continuing professional development” has been introduced. I don’t think the PDGB knows its audience. It’s been captured by lawyers.

One unintended consequence of regulation that intends to protect consumers arises because plumbers are not accountants. The median accountant is more conformist than the median plumber (this is an anecdotal assertion I have to concede) – but in essence, who is more likely to be a good little guild member and toddle along to CPD seminars?

Furthermore – the CPD is quite expensive and a lot of plumbers who want to play by the rules will call the system out for the BS it incorporates – they have to pay a whole new set of expenses just to stay in business, as well as lose time spent on other activities like business development or bookkeeping.

Thus, it is possible that a lot of plumbers, drainlayers and gasfitters will ignore the benefits of stricter licensing and simply gamble on a prosecution for performing work while unlicensed. The construction sector is notorious for price competition without thought and cashies, so how many households will care about the trade-off between licensed and unlicensed work unless it invalidates their insurance?

Yeah. Plumbers, drainlayers and gasfitters have missed the benefits of making it harder to be part of their guild. There has been some outcry over prosecution of unlicensed plumbers – many who have never had any complaints over work quality. But is a $2,300 fine sufficient to deter a plumber from doing something he might hate with a passion, namely toddling along to a CPD seminar on “health and safety”?

I’m skeptical that this new licensing regime, which is a whole different breed from the previous one which relied more on work assessments and exams, then you were good to go, will achieve the objective it set out to – reduce the number of “cowboys” who impose costs through performing shoddy work.

One of the problems that regulators have to take into account is the personality types of the people they are regulating. In their marketing of the new regime to plumbers, drainlayers and gasfitters they haven’t sold the biggest benefit of more licensing – restricted entry and an opportunity to raise prices.

Demand for time sensitive plumbing work is quite inelastic – you want your broken pipes fixed ASAP and have a high willingness to pay. Demand for less time sensitive plumbing work might involve getting a few quotes, but if you insist on getting a licensed tradesperson I expect that over the next few years the number of prosecutions against unlicensed tradies will be far higher than expected.

Hekia Parata is quoted on TVNZ with the quip that plumbers can charge more than lawyers. This forgets the reality that many tradespeople have not recovered from the downturn in construction. They are locked into a set of contracts and payments that prevents them from moving to where the work is, and many have moved to Australia.

If the lie about more immigration being the answer to a “skills shortage” in construction comes up, I’ll have to start ringing up tradespeople I know and running some video interviews on the reality of construction in New Zealand as opposed to the perceived reality of bubble-inhabiting regulators that stop anything getting built.

Furthermore, as another unintended consequence of the new licensing regime, it will be far more expensive to take on an apprentice! This means at the margin, less plumbers, drainlayers and gasfitters will be trained and therefore the “skills shortage” will become even worse. Oh what a tangled web regulators weave!