An active and vigorous response has greeted the Productivity Commission’s Draft Report entitled Review of Legislation Regulating the Architectural Profession, a document that represents an enormous challenge to Australian architects. The draft report recommends that all legislation regulating the architectural profession be repealed within two years. The Commission observes that the eight state and territory architects acts limit the use of the title ‘architect’, but not the practice of architecture. It sees no community benefits in certifying architects and concludes that the costs of regulation (although low) outweigh the benefits. The Presiding Commissioner, Judith Sloan, argues that the repeal of the architects acts would result in better marketing by architects and that this is to the profession’s advantage. “Greater competition is not only likely to serve the interests of the community, but also the long term interests of the profession itself.”
Architecture is the first profession to be reviewed in the wider National Competition Policy (NCP) legislative review programme, which will see the review of all legislation restricting competition by the end of 2000. The underlying principle of the NCP review programme is that competition generally promotes best outcomes. It is noted, however, that the market may not always “generate optimal outcomes”, and that on these occasions government intervention may protect public interest. However, imperfect market operation is not seen as necessarily justifying intervention as “markets sometimes generate their own solution”. In the case of architecture, the Productivity Commission is charged with assessing whether the public benefit resulting from the architects acts outweighs their apparent anti-competitive nature.
Amongst the initial 383 submissions received, the Commission considered an extensive paper from the RAIA. This made a series of recommendations: that a system of national co-regulation be adopted; that the practice of architecture be regulated along with the title; that education be no less than five years fulltime in an accredited institution; that the standards of ongoing practice be monitored; that legislation provide for a mandatory code of ethics and conduct; that a government agency or tribunal deal with transgressions of this legislation; that ongoing professional development be mandatory; and that professional indemnity insurance be mandatory.
None of these recommendations have been taken up in the Draft Report. The Commission identified two possible grounds for regulatory intervention: spillover effects (building design affects neighbours and the wider community) and asymmetric information (the client has less information than the designer does). The RAIA believes that both these matters represent compelling cases for regulation. However the draft report argues these issues can be satisfactorily addressed via other means. It suggests that consumers will simply become more informed in a deregulated environment and that spillover issues are best dealt with in building and planning codes. The report also questions architects’ judgements on these matters. “It is not clear that architects’ views (often divergent) of what is appropriate in terms of design, culture and resource use reflect the views and interests of the wider community. Such matters are more properly the domains of elected governments…. It is also questionable how much emphasis an architect, undertaking a private commission, should give to broader community impacts, if these conflict with the client’s interests.”
While the RAIA agrees with some of the Commission’s findings, it is very concerned by the conclusions drawn. The current regulatory environment is cumbersome and needs revision, but the Institute does not believe that the deregulated market proposed in the draft report will produce better outcomes. The apparent downgrading of the value of professional knowledge, education and expertise is also an occasion for alarm. The RAIA comments, “There is a widely held belief, evident also in the report, that the untrained and unqualified can provide architectural services to a standard that serves public interest.”
In a detailed response to the draft report, the Institute argues that the criteria adopted for the NCP reviews are inappropriate and will lead to flawed conclusions. Price-based competitive models are not adequate for knowledge-based professions such as architecture. Design quality and the provision of | | 
satisfactory service cannot be improved through such models. The RAIA refers to CSIRO research findings that lower design and documentation costs result in a significantly reduced quality of service and significantly higher construction costs. The Institute also points out that architecture is already a highly competitive field. Further, it argues that the draft report “fails to demonstrate that existing legislation is anti-competitive and fails to acknowledge that the reasons for existing market failure would be exacerbated in a deregulated market”. The RAIA is concerned that the report does not recognise the public benefit gained from high standards of architectural practice. It also believes that the draft report does not fully respond to the Commission’s terms of reference, particularly with regard to the quality of the built environment and sustainable development. The RAIA response comments that “government and community aspirations for ecologically sustainable development and better quality urban environments are not delivered by mere compliance with construction and planning regulation”. The Institute believes that these aspirations cannot be realised without statutory intervention and architects’ special skills and knowledge.
The assumption that the educated consumer can replace the educated professional is also problematic. The RAIA observes that architectural clients are often only in the market once or twice and as such they are rarely well informed. It is also impossible to educate a potentially infinite client base. As for spillover effects, the RAIA replies that the most direct approach is, quite simply, to have appropriate design undertaken by those trained and qualified to do so.
The self-regulating regime envisaged by the Productivity Commission also poses problems for Australian architects working abroad. The Commission notes that this may be an issue, but that alternative mechanisms can be devised to deal with it. In contrast, the RAIA is certain that the competitiveness of Australian architects on the world market will be significantly impeded. The International Union of Architects represents architects in 58 countries; only 3 do not have legislation regulating the architectural profession. In this international environment the RAIA believes it will be difficult to argue for the effectiveness of private regulatory systems.
Finally the RAIA reiterates the need for the Productivity Commission’s final report to enable the following: a nationally uniform statutory system of registration and regulation, conforming to world’s best practice; an environment in which potential market failure is addressed by guiding consumers towards the best qualified suppliers of architectural services; and a competitive environment in which consumers seek to appoint architects on the basis of their knowledge, skill and capability. To these ends the RAIA is currently developing a co-regulatory model. —Justine Clark |
