Licensing rules that stop tradespeople working across state borders must be changed to ensure faster rebuilding after disasters, the Insurance Council of Australia has told a federal government inquiry.

The National Competition Council is reviewing mutual recognition schemes, which allow workers licensed in one state to have their qualifications recognised in another. It will report within six months on ways to remove unnecessary barriers to a single national labour market.

ICA says that as extreme weather events increase in number and severity, the country needs a skilled workforce that can be deployed where needed to rebuild, and enhancing “surge capacity” should be a government priority.

“The Insurance Council therefore supports the automatic mutual recognition of qualifications to ensure the rapid onboarding of interstate and trans-Tasman surge workers when disaster-affected homeowners are most in need.”

ICA notes Queensland does not participate in the automatic mutual recognition scheme. It calls for greater harmonisation and recognition of interstate licences.

“State-based licensing, exemptions and inconsistent application need urgent attention to minimise costs to industry, which is already experiencing the effects of supply chain shortage and fuel insecurity,” ICA’s submission to the inquiry says.

The peak body says insurers recognise the importance of regulation, including operator eligibility licences for high-risk trades. It supports maintaining eligibility licence requirements in plumbing and electrical and structural building work, where poor workmanship poses safety risks.

But there is scope for greater uniformity in operator eligibility licences. ICA notes that in Victoria, electricians must hold $5 million of public liability insurance, while NSW does not require cover.