Taking a haircut: The states where you’re paying more at the salon
By Shane Wright and Millie Muroi
Australians are being forced to pay too much for trips to the hairdresser, repairs to their cars and painting for their homes by a patchwork of licence rules that the Productivity Commission says are hurting consumers and prospective workers.
As part of a study that calls for an overhaul of high school and post-secondary education to deal with a growing number of students finishing their studies without key skills, the commission argues protections put in place by particular industries are imposing widespread financial costs across the economy.
Tessa Leonard says being forced to do extra training despite her experience in hairdressing would have made life more difficult and expensive.Credit: Joe Armao
People in NSW and South Australia who want to become hairdressers need to complete a certificate III training course, at a cost of $13,000 to $28,000, putting upward pressure on prices. There is no evidence that it has improved the quality of cuts and colours compared with other states.
The commission’s study, the fourth of five it is releasing before next week’s three-day economic roundtable, warned that the pace of economic change meant some existing jobs would disappear and others would be created, while new skills would be required for existing occupations.
Ninety per cent of new jobs in coming years would require post-secondary qualifications from either universities or vocational education centres.
But the commission found consumers were being harmed by regulations governing existing jobs.
It said occupational entry regulations (OERs), which require workers to meet minimum conditions such as a licence, were growing. One in five people were subjected to them, worsening worker shortages.
In occupations such as hairdressing, vehicle repairs, painting and decorating, there were differing licence conditions across the country, but without measurably different outcomes.
In the case of hairdressers, it found the certificate III requirement in NSW and South Australia, which does not apply in other states, meant there were fewer migrants in the occupation compared with the rest of the country.
Melbourne-based hairdresser Tessa Leonard, who works at Pamela Rose Hair in Gardenvale, completed an apprenticeship in England before backpacking around Asia and then making the move to Australia.
“I just fell in love with it. I definitely find hairdressing here a little bit more relaxing than in England,” she said.
Leonard has been hairdressing in Australia for 10 years, and while she said she would have pushed herself to do a certificate III qualification if necessary, it would have been a hassle.
“It would have added more cost and pushed back my work,” she said. “When I came over here, I found it easy. It was just about filling in paperwork, showing proof of my skills and workplaces.”
Parts of the hairdressing industry argue that reducing licence standards would affect quality and make it easier for people to undercut prices offered by salons.
But the commission, which recommends NSW and SA ditch their requirements, argued that lower prices were a benefit to consumers while noting that online reviews of hairdressers had a much bigger impact on those in the profession than occupational licences.
Motor mechanic regulations differ across the country, but the quality of repairs is effectively the same.Credit: Jim Rice
Over the past five years, hairdressing and personal grooming costs in Sydney have climbed by 28.3 per cent – the highest rise of any capital city and above overall inflation of 23.9 per cent.
By contrast, hairdressing costs in Melbourne have gone up 20.2 per cent.
Productivity commissioner Catherine de Fontenay said governments should loosen “rigid” licence requirements.
“Streamlining excessive OERs while maintaining safety and quality standards can lower prices for consumers and help people make the most of their skills and experience,” she said.
Apart from overhauling occupational licences, the commission recommends major changes to help school teachers ensure their pupils have so-called foundational skills, which would enable them to switch careers throughout their working lives.
It says a single national online platform should be set up that would give teachers a bank of “high-quality, curriculum-aligned” lesson planning materials that would be available to all public and private schools.
Teaching tools including AI and other forms of technology would be made available nationwide, with states responsible for teacher training.
“The academic abilities of students in any one class are wide, and teachers are under huge pressure to produce quality materials for all of them. We need to give our teachers time and support to do the thing they do best – teach,” de Fontenay said.
The commission’s research has highlighted the lack of major productivity growth among small and medium-sized businesses. Its plan to reduce the company tax rate to 20 per cent would deliver the biggest benefits to small firms.
It recommends that the federal government trial a system of tax credits for smaller businesses that increase work-related staff training.
“Australia’s training rates are low, both overall and relative to other countries. Policies are needed to support these firms to better train their workers,” the commission found.
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