Treasurer Josh Frydenberg hopes simplifying licensing requirements for tradespeople will help create jobs, as state and federal governments strike their first agreement under a new national post-COVID council aimed at stimulating employment.

Under the proposal, which the Treasurer said was about cutting “red tape”, tradespeople would be able to work anywhere in Australia after getting a licence to operate in one state.

Currently, a patchwork of inconsistent state regulations mean some workers need to obtain multiple licences – as well as undertaking several application processes and paying numerous individual fees – to work across borders.

Mr Frydenberg said that arrangement is “complex, costly, and imposes an excessive regulatory burden on businesses”, and that state and territory leaders had agreed to a new system whereby only one licence would be required to carry out equivalent work in other jurisdictions.

Josh Frydenberg hopes the changes will be ready for January. Photo: AAP

“Automatic recognition will help to address impediments to labour mobility across jurisdictions by allowing a person who is licensed or registered in one jurisdiction to be already considered registered in another in an equivalent occupation,” he said.

Mr Frydenberg said there were about 800 individual licence types across the country in manual trades, and that this change would simplify the process.

The government said it hoped cutting costs would make it easier for businesses to operate across borders, or for individual workers to relocate to areas of more work, if needed.

“The new framework will cut red tape, drive job creation and allow workers to move more freely around the country to where the work is,” Mr Frydenberg said.

“This will especially assist our tradies apply their craft around the country without having to get individual licences in each state or territory if they are working across borders.”

It’s the first time the newly-minted Council on Federal Financial Relations (CFFR) has been tasked by state and territory leaders.

Operating under the National Federation Reform Council structure, which has replaced the Council of Australian Governments (COAG), the financial relations council will report back to the national cabinet in October, ahead of the licensing scheme’s proposed introduction on January 1.

The government said tradespeople like hairdressers would be included in the scheme. Photo: AAP

“This reform sees federal, state and territory governments working co-operatively together to get people back to work as restrictions are eased and our economy reopens,” Mr Frydenberg said.

The plan, the intricacies of which will be figured out by the CFFR, will apply to as many trades as possible, with only “limited exceptions” where licensing will not be automatically recognised nationally.

In a 2015 report, the Productivity Commission said it supported the general concept – known as ‘automatic mutual recognition’ – as being a “flexible, low-cost way of facilitating trade and labour mobility”.

The government said applying for multiple licences, even for people working in areas that straddle borders – such as between NSW and the Australian Capital Territory – may currently have to shell out hundreds of dollars for the permission to work in both jurisdictions.

However, a person in the same trade in another part of the country may have to abide by a different set of rules, go through a different qualification process, or pay a totally different set of fees.

The CFFR is set to report to the national cabinet in coming months.