Mutual recognition schemes

• The Mutual Recognition Agreement (MRA) and Trans-Tasman Mutual Recognition Arrangement (TTMRA) are generally working well. The benefits include making it easier to do business across borders and a wider range of goods and services.
• However, the value of the schemes risks slowly being eroded due to regulators not always implementing mutual recognition as required, weak oversight, and an increase in the number of goods and related laws permanently kept outside the scope of the schemes.
• There are specific concerns with the operation of mutual recognition of occupations relating to 'shopping and hopping', continuing professional development, background checks and determining occupational equivalence. These issues have the potential to weaken the community's and regulators' trust in the schemes and undermine their legitimacy.
• This review has therefore focused on improving governance arrangements, potentially expanding coverage, and addressing irritants to the smooth operation of the schemes.
• The Commission proposes to reform the governance arrangements by:
  • strengthening the cross-jurisdictional group of officials responsible for publicising, overseeing and coordinating the schemes, including by giving it more specific responsibilities, time frames, outputs and reporting arrangements
  • improving regulator accountability in individual jurisdictions, including by setting clear expectations and annual reporting on mutual recognition matters.
• The Commission proposes the following to improve the operation of the schemes.
  • Where there are legitimate concerns about shopping and hopping, governments should make better use of existing mechanisms to address them, such as referring a jurisdiction's registration requirements to a COAG Ministerial Council for consideration.
  • Governments should reduce ambiguity about the schemes' scope by clearly stating that mutual recognition applies to legislation-based occupation registration regardless of whether it is administered by a government or non-government body, and that continuing professional development can be required for all persons renewing their occupational registration, including those previously registered under mutual recognition.
  • Registration bodies should be able to continue to conduct their own background checks on people seeking registration under mutual recognition.
• The Commission proposes to expand the coverage of the schemes in a few areas.
  • There is scope to narrow TTMRA permanent exemptions for road vehicles and hazardous substances, industrial chemicals and dangerous goods.
  • The Commission is seeking further information on whether mutual recognition should be extended to state business registration requirements, such as for electrical contractors.
  • However, other areas currently outside the scope of the schemes - including laws on the use of goods and the manner of carrying on an occupation - should remain so.
• There would be benefits from allowing licensed professions to provide services beyond their home jurisdiction without having to register again under mutual recognition. But this approach - known as automatic mutual recognition - has some practical challenges, and so a staged implementation is preferred, starting with professions where standards are similar across jurisdictions and the profession is large and mobile.
• The period between formal reviews of the schemes should be increased to ten years.

Action needed on mutual recognition

Australia's and New Zealand's mutual recognition arrangements are generally working well, according to a draft Productivity Commission report released today.

Australia's and New Zealand's mutual recognition schemes are unique in the world by their extensive scope and coverage. They make it easier to do business across borders and give consumers a wider and more competitive range of goods and services.

However, the draft report also warns that the benefits from Australia's Mutual Recognition Agreement and the Trans-Tasman Mutual Recognition Arrangement risk slowly being eroded due to regulators not always implementing them as intended, weak oversight, and a growing number of exemptions.

'Unless addressed, these issues have the potential to weaken the community's and regulators' trust in the schemes and undermine their legitimacy,' said Commissioner Jonathan Coppel.

The draft report proposes recommendations aimed at fixing irritants to the smooth operation of the schemes, expanding their coverage and improving their governance arrangements.

The Commission is seeking written feedback on the draft report by 24 July. A final report will be provided to Heads of Government in Australia and New Zealand in September.

• Preliminaries
  • Cover, Copyright and publication details, Opportunity for further comment, Terms of reference, Contents, Abbreviations and Glossary
• Overview
• Draft findings and recommendations
• Chapter 1 About the review
  • 1.1 What the Commission has been asked to do
  • 1.2 Previous reviews of the MRA and TTMRA
  • 1.3 Mutual recognition in the wider context
  • 1.4 Conduct of the review
  • 1.5 Structure of the report
• Chapter 2 Rationale for the schemes and approaches to their assessment
  • 2.1 Regulatory cooperation as a tool to promote economic integration
  • 2.2 Rationale for mutual recognition in Australia and New Zealand
  • 2.3 Anticipated benefits and costs of the schemes
  • 2.4 The Commission's framework for assessing the schemes
  • 2.5 Evidence used to support recommendations
• Chapter 3 Overview of the mutual recognition schemes
  • 3.1 Origins of the mutual recognition schemes
  • 3.2 Legislative underpinnings
  • 3.3 Mutual recognition principles and processes
  • 3.4 Scope and coverage of the schemes
  • 3.5 Review mechanisms
  • 3.6 Governance arrangements
• Chapter 4 Mutual recognition of goods
  • 4.1 Operation of mutual recognition
  • 4.2 Scope of mutual recognition for goods
  • 4.3 Converting from special to permanent exemptions
  • 4.4 Other limits on the coverage of mutual recognition
  • 4.5 Use-of-goods requirements
• Chapter 5 Mutual recognition of occupational registration
  • 5.1 Rationale for occupational registration
  • 5.2 Forms of occupational registration covered by the schemes
  • 5.3 Use of mutual recognition
  • 5.4 Concerns about shopping and hopping
  • 5.5 Improving the operation of mutual recognition
• Chapter 6 Facilitating cross-border service provision
  • 6.1 The case for automatic mutual recognition
  • 6.2 Automatic mutual recognition in Australia
  • 6.3 Challenges to expanding automatic mutual recognition
  • 6.4 Manner-of-carrying-on requirements
  • 6.5 Extending automatic mutual recognition to trans-Tasman service provision
  • 6.6 Mutual recognition and business registration
• Chapter 7 Governance arrangements
  • 7.1 Evidence of limited oversight and coordination
  • 7.2 Resulting erosion of benefits from the schemes
  • 7.3 Strengthening collective oversight and coordination by governments
  • 7.4 Improving oversight by individual jurisdictions
  • 7.5 Mutual recognition in new policy proposals
  • 7.6 The role of individual jurisdictions in legislating reforms
  • 7.7 The frequency of independent reviews
• Appendix A Public consultation
• Appendix B Overseas models of mutual recognition
• Appendix C Survey of occupation-registration authorities
• References

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• High resolution - Doing Business in Australia and with New Zealand (PDF - 1067 Kb)

Doing Business in Australia and with New Zealand (Text version of the infographic)

Australia's and New Zealand's mutual recognition schemes are unique in the world and deliver many benefits to businesses, workers, consumers and governments.

However, action is needed to ensure smooth operation of the schemes.

How can regulators and governments help?

• Improve operation of the schemes
• Strengthen oversight
• Decrease exemptions

'Unless addressed, these issues have the potential to weaken the community's and regulators' trust in the schemes and undermine their legitimacy.' Commissioner Jonathan Coppel.

The benefits are wide ranging

• Labour mobility
• Trade in goods and services
• Consumer choice

Read more detail in the report.