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Review of mutual recognition schemes (2009)

Research report

This research report was released on 6 February 2009.

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  • Key points
  • Media release
  • Contents
  • Mutual recognition is a low-cost, decentralised means of dealing with interjurisdictional differences in laws and regulations.
  • The Mutual Recognition Agreement (MRA) and the Trans-Tasman Mutual Recognition Arrangement (TTMRA) have increased the mobility of goods and labour around Australia and across the Tasman.
    • Greater mobility of goods and labour is a potential source of economic benefits, and is consistent with a move to a seamless Australian economy and a single trans-Tasman market.
  • The schemes operate less effectively on the occupations side than on the goods side.
    • Differences in occupational standards between jurisdictions are a source of regulator concern, due to the potential for deficient standards to cause harm.
    • Allowing ongoing professional development and criminal record checks for mutual recognition registrants, that already apply to local registrants, would mitigate some of the risks created by interjurisdictional differences in standards.
  • On the goods side, the efficiency and effectiveness of the schemes could be improved through an expansion of their coverage.
    • A range of goods are currently exempted but could now be mutually recognised. They include most gas appliances under the TTMRA and goods covered by Australian ozone protection laws under the MRA.
  • In some areas, the impetus towards trans-Tasman mutual recognition or harmonisation has stalled, creating unnecessary costs for stakeholders.
    • Unless the New Zealand Parliament can soon pass legislation enacting a joint regulatory regime, the special exemption for therapeutic goods should become a permanent exemption, so as to avoid uncertainty.
  • Aspects of the machinery of the schemes should be improved to reduce the administrative and legal burden they create for governments and other stakeholders.
    • Cooperation programs associated with special exemptions under the TTMRA should have a rollover and reporting period lasting up to three years.
  • Regulators often do not meet their mutual recognition obligations, and firms and individuals do not make full use of the schemes.
    • Two specialist units should be created to facilitate the operation of mutual recognition of goods and occupations, through the provision of advice, complaint resolution, monitoring and awareness raising.
  • Bilateral engagement by Australia and New Zealand with third countries creates more opportunities than risks for the mutual recognition partner, as long as mutual recognition implications are taken into account before agreements are made.
  • Amendments to the mutual recognition legislation are urgently needed to remedy ambiguities and omissions in the Acts, as well as to enable the schemes to reach their full potential.

The mutual recognition schemes linking Australian states and territories and New Zealand have contributed to the creation of a seamless national economy in Australia and a single economic market across the Tasman, according to a report by the Productivity Commission.

This, and other findings are contained in a review of the schemes the Commission presented to Australian Heads of Government and the New Zealand Prime Minister in early February 2009. In an assessment of the two main mutual recognition schemes - the Mutual Recognition Agreement (MRA) and the Trans-Tasman Mutual Recognition Arrangement (TTMRA) - the Commission found that they brought benefits through increased mobility of labour and greater movement of merchandise between jurisdictions.

Commissioner Judith Sloan noted that 'mutual recognition retains the scope for regulatory competition between jurisdictions while removing unnecessary barriers to the movement of goods and workers.'

The Commission found, however, that ambiguities and omissions in the legislation create frictions in the operation of the schemes. Moreover, a lack of awareness of mutual recognition means that businesses, individuals and regulators do not always use the schemes fully or appropriately.

The Commission is recommending a suite of administrative, regulatory and legislative changes to mutual recognition arrangements which, if implemented in the near-to-medium term, would reinvigorate the schemes and allow them to reach their full potential.

  • Preliminaries
    Cover, Copyright, Terms of reference, Extension of the reporting date, Foreword, Contents and Abbreviations
  • Overview - including key points
  • Findings and recommendations
  • Chapter 1 About the review
    1.1 What the Commission has been asked to do
    1.2 This review is timely
    1.3 Other reviews in this area
    1.4 Conduct of the study
    1.5 Structure of the report
  • Chapter 2 Overview of the mutual recognition schemes
    2.1 Background to mutual recognition
    2.2 Legislative underpinnings
    2.3 Mutual recognition principles and processes
    2.4 Scope and coverage of the schemes
    2.5 Dispute resolution processes
    2.6 Monitoring and compliance systems
    2.7 Recent developments
    2.8 Previous reviews
  • Chapter 3 Rationale for the schemes and approaches to their assessment
    3.1 Rationale for the schemes
    3.2 Interpretation and application of assessment criteria
  • Chapter 4 Economic impacts of mutual recognition
    4.1 Impact on compliance costs
    4.2 Impacts on goods markets
    4.3 Labour market impacts
    4.4 Conclusion
  • Chapter 5 Registration of occupations
    5.1 Registration arrangements covered by the schemes
    5.2 Differences in occupational standards
    5.3 Conditions — confusion over what is permitted
    5.4 Scope differences — impeding labour mobility?
    5.5 Mutual recognition machinery — working well?
    5.6 Regulator expertise and public awareness could be improved
    5.7 Local knowledge requirements
    5.8 Recent COAG initiatives relevant to occupations
  • Chapter 6 Temporary exemptions
    6.1 Procedures for resolving temporary exemptions
    6.2 Interaction with Australia's product safety regime
    6.3 TTMRA option of an implementation period
    6.4 Joint Australian approach to initiating TTMRA temporary exemptions
  • Chapter 7 Special exemptions
    7.1 Hazardous substances, industrial chemicals and dangerous goods
    7.2 Therapeutic goods
    7.3 Road vehicles
    7.4 Gas appliances
    7.5 Radiocommunications devices
    7.6 Annual rollovers
  • Chapter 8 Scope of mutual recognition - goods
    8.1 Permanent exemptions
    8.2 Exclusions
    8.3 Exceptions applying to goods
    8.4 A possible extension to the Acts
    8.5 Advisory and dispute resolution mechanisms
  • Chapter 9 Exemptions and extensions - occupations
    9.1 The permanent exemption for medical practitioners
    9.2 Is universal registration essential to mutual recognition?
    9.3 Mutual recognition of business registration
    9.4 Cross-border and short-term service provision
  • Chapter 10 Mutual recognition in the wider context
    10.1 Bilateral engagement with third countries
    10.2 Recent Australia and New Zealand mutual recognition initiatives
  • Chapter 11 Awareness, expertise and oversight
    11.1 Design of the schemes and past reforms
    11.2 Why have past efforts been unsuccessful?
    11.3 The way forward
  • Chapter 12 The next steps for mutual recognition
    12.1 Improving understanding and governance
    12.2 Legislative changes
    12.3 Longer-term considerations
  • Appendix A List of submissions, visits and consultations
  • Appendix B Legal advice
  • Appendix C Overseas models of mutual recognition
  • Appendix D Survey of occupation-registration authorities
  • Appendix E Labour market impacts of mutual recognition
  • Appendix F Scope of registered occupations
  • References

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