Master Plumbers is calling for an urgent review of the fees charged to the industry by the regulator, and has written to Building and Construction Minister Megan Woods asking for a governance review of the “highly problematic” Plumbers, Gasfitters and Drainlayers Board.
Master Plumbers Chief Executive Greg Wallace said in a letter sent to Woods earlier this month that plumbers are paying licensing fees a “staggering” 380% higher than comparable trades such as electricians.
Plumbers, gasfitters and drainlayers pay $600 per year to legally work in the sector which covers licensing and a new credit card levy, whereas electricians pay $125 a year and carpenters $281.11.
Tradespeople who work solely as plumbers pay $400 per year, this also includes the credit card levy.
The licensing fee for one class of licence (plumber, gasfitter or drainlayer) before the new increase in April this year was $375.
Wallace said for the last two financial years, the Plumbers, Gasfitters and Drainlayers Board (PGDB) had recorded annual surpluses totalling a combined $1.6 million.
The regulator had also reported total assets of more than $7.7m, Wallace said, more than $1.3m above PGDB forecasts.
The PGDB annual report for the most recent financial year showed it had accumulated $3.9m in investments and had $1.5m in cash and cash equivalents.
“Despite this,” the Master Plumbers letter said, “the Board has approved an increase to licence fees for 2022 and also applied a credit card levy to practitioners paying to renew their licence. These fees are now set for three years, even though it has been evident that the last modelling for fees significantly undervalued the number within the trade and therefore insured significantly more profit than initially forecast by the board.”
Wallace said there needed to be an urgent review of annual licence 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 would increase fees from April 1 this year.
The board said in its annual report it was “very mindful of the impact to practitioners and businesses in these challenging times with the disruptions from Covid-19”.
“Ultimately the Board considers these fee increases are necessary to ensure financial sustainability.”
In a statement, PGDB chief executive Aleyna Hall said the board ensures 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 gets no Government funding and is fully funded by the industry, while the EWRB gets Government funding.
She said comparisons with the EWRB also needed to take into account that the electrical regulator shared secretariat costs with the Ministry of Business, Innovation and Employment (MBIE) and the PGDB does not.
In terms of the board’s financial position, since the fees review, Hall said it had a 10% increase in licences issued and an 18% increase in applications for registration, while trainee numbers were also up across all three trades and expenditure for the period was lower than expected.
Hall said the credit card surcharge is the fee that is charged by the various banks and is not kept by the PGDB.
Master Plumbers also took aim at the disciplinary levies its members pay to the board which covers the costs of investigating complaints against tradespeople, and also illegal work done by those not in the sector.
The disciplinary levy alone took in $1.3m from registered tradespeople in the financial year ended March 31, 2022.
Wallace said the annual report showed that of the 1535 calls to the PGDB help desk only 55 complaints were investigated, resulting in “just 37" successful disciplinary prosecutions against registered practitioners and six successful criminal prosecutions against non-licenced 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 role of the PGDB, he said its composition and the way it went about its job “continue to be highly problematic”.
But Hall said the PGDB had “a unique role in prosecuting unregistered and unlicensed people carrying out unlawful work”.
“The Board recognises that plumbers, gasfitters and drainlayers are required to fund prosecutions of people who unlawfully carry out sanitary plumbing, gasfitting and drainlaying. Unlike builders and electricians, our practitioners do not get any public funding for this function. The Board has approached MBIE on a number of occasions to apply for funding for this function, most recently at the end of 2020, so that practitioners are not required to carry this cost. However, to date the Board has been unsuccessful.”
Hall said 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 provide funding for current disciplinary cases and for the costs of future disciplinary cases as they arise.
These costs are difficult to budget as there is uncertainty in how many complaints the board will receive and how many will proceed to the Hearings Panel, Hall said.
The increase to the disciplinary levy reflects the board’s prudent approach to ensure there are sufficient funds to cover disciplinary costs for the coming three years.
“This year we are only half way through and we have already seen a huge increase in the number of complaints and prosecutions,” Hall said.
She said the number of complaints that the board had received from 1 April 2022 had increased by 131%.
“We have 12 active prosecutions before the District Court for unauthorised work, 11 of those are awaiting sentencing.”
Master Plumbers was concerned there are fewer licensed tradespeople appointed to the PGDB, and said there are no apprentices appointed at all, "meaning the diversity of a younger voice is entirely missing".
Wallace said with a shortage of young people in the trade, it was imperative the board understands the needs of younger plumbers. The minister makes appointments to the board.
The PGDB has a chequered history as a regulator, with long-running legal battles about the fees it charges in particular, and its competence.
The disciplinary levy was found to be unlawful by the Ombudsman in 2013 and legislation was introduced to retrospectively smooth it over.
Despite recommendations from the Ombudsman that the board consider returning some of the levy funds collected while it was unlawful and that licencing fee periods could be extended to avoid the appearance that yearly licencing was a revenue gathering exercise, the PGDB made no changes.
In 2010 the Auditor-General probed the PGDB, finding issues with most of the board's functions, questions about the legal basis of the board's policies and actions and cited a closed and defensive culture and a sector that was characterised by suspicion and discontent.
Hall said the PGDB valued the relationship it has with Master Plumbers.
“We recognise that our interests and Master Plumbers’ will not always align, however this is appropriate given our differing roles within the sector.”
Minister Woods has been approached for comment. And there's background to this story here.
20 Comments
We shouldn't hold our breath waiting for anything coherent coming from Megan Wood's mouth.
Keep on the task Rebecca, we need more light to shine on these little scams condoned or created by the Wellington Mafia.
For all the stick Roger Douglas and his "fish & chips" group of ministers received for what is loosely termed "Rogernomics", they at least threw open the doors of many cosy quangos which grow in the dark and which act like leeches on the productive sector.
A problem with technical type regulations is you rely on the very people you appoint to these boards to give the minister advice on the regulations. For the most part ministers are political types who have never worked in the industry for which they approve regulations, or for that matter in any industry.
Regulations need to be peer reviewed by a technical person with very little dependency on income from that industry. Not easy to find such a person/s
And if such prosecutions didn't happen you'd lose a ton of business to non licensed people (that may or may not be "cowboys", plenty of people that are quite capable of digging a trench and laying stormwater pipe to the required standard).
It comes down to are you willing to defend your turf or not? Or perhaps you are willing to give up your protected turf and let any Joe Bloggs have a go?
$11.50 (One lunchbar lunch) a week to keep the cozy protectionist racket going seems pretty reasonable to me. *shrug*
Gotta laugh when I've had plumbers in online forums tell me I'm not allowed to change the washer in the ajax valve, that I'll have to pay $150 in callout fees for a plumber to crawl under the house and spend 5 mins slipping a new $5 washer in. Strangely enough I managed to do it myself, and the house is still standing, and no puddles under it either.
Pfff. They charge like $150 an hour so whats 600 tax deductable dollars out of their wage once a year.
I had a plumber charge me a $40 'service fee' for his van. Another (wanted to) charge me extra, if I lived more than 5 ks out of town. Just saying.. Next they'll want lunch money !
We really should feel sorry for plumbers (or any other business) that have to hand their invoice direct to grumpy Joe Public who resents having to spend his own money. It's just so hard to update the ute every year and buy another rental that way.
Ideally they are on a sweet council or government job and so hand their grossly overinflated invoice to a head contractor who adds their 15% markup (no questions asked because the bigger the invoice the more markup they can clip on).
I use a plumber who is very reliable, and expensive.
He charges a $45 + GST callout fee, and $95 + GST hourly rate.
He is very good and in my view just stupidly expensive, but guess what, had to use him after a number of unreliable plumbers that caused more issues.
Shrug, hard to find a good tradesmen, by good I mean reliable, quality work, and who does not want to rob you.
“in my view just stupidly expensive”
The average person (add Govt too) is so clueless as to what it costs to run a business that relies on human labour for a large proportion of its revenue. But they will justify all the reasons under the sun why they should be paid X amount of wages and given x amount of leave and entitlements.
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