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Demerit points system for licensing

This policy sets out that HIA opposes demerit points systems in respect to builder licensing, as they are inherently flawed, arbitrary, provide a disproportionate response to offences and may affect those associated with a business.

HIA's Position statement

  1. HIA strongly opposes demerit points systems as the systems:
    • are inherently flawed
    • will operate arbitrarily and unfairly
    • will provide a disproportionate response to the nature of the offences incurred
    • may have a significant detrimental effect on a licensee’s employees and subcontractors and
    • will present and give rise to an uninsurable risk for private insurers.
  2. On the basis of Recommendation 1, HIA strongly opposes any system that:
    • removes judicial discretion to review the decision to suspend or cancel a licence through limiting any assessment to purely quantitative and objective criteria (i.e. has the number of points been reached?)
    • seeks to reverse the onus of proof from the regulating body to the contractor and
    • has an arbitrary limit on the number of allocated demerit points regardless of activity.


  • A demerit point system is similar to a driver’s licence system, where a licence holder has a demerit over a set period of time. There are certain offences where a licensee will incur demerit points. If the licensee accumulates demerit points to the threshold within the period of time, the licensee may lose the right to hold the licence.
  • A significant issue with a demerit point system is its potential to impact directly on the licensee’s livelihood.
  • The reasons for the development of the demerit point system relate more to easing the administrative effort of regulating bodies than matters of significant non-compliance.
  • Demerit points are imposed administratively (subject to appeal) for specified (often low grade) offences. When the licensee’s demerit points reach a certain threshold the consequences are automatically triggered – in the case of the present system in Queensland – without further right of appeal.
  • A person may have a licence cancelled or suspended based on the mathematical formula without the regulatory body having to show that the licensee is, in fact, not fit and proper to hold a licence.
  • Due to the automatic consequence of reaching the threshold, and its corresponding impact on a person’s livelihood, any demerit points system will need to have appropriate checks and balances to ensure that there a sufficient degree of natural justice and equity for the affected licence holders.

Policy endorsed by HIA National Policy Congress: March 2004; Re-endorsed May 2015; Amended 2020.

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