Demerit points system for licensing

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.

Background

• 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 & 2025; Amended 2020. Re-endorsed 2025.