Ask LH: Why Doesn't The ACCC Regulate Plumbing Prices?

Dear Lifehacker, After your article on GimmeQuotes, I thought you might address the problem of plumbers' obscene pricing! I have a job that would take me no more than three hours, so shouldn't take a pro more than two — it's a very simple job with easy access! I can purchase the hardware (pipe, fittings, etc) for under $200. Given that most plumbers around here charge around $75 an hour, I just can't understand why the quotes are coming in at around $1000 to $2000.00.

I know how to do it myself, so it's particularly galling that the law states that I have to submit to this outrageous practice. I realise that plumbers are in great demand, so most of them aren't interested in small jobs like mine, hence they will quote extremely bloated prices to rid themselves of the issue. So why are those that are "interested" still gouging their customers! Why? Because they can, and the ACCC allows it! Cheers, I've Got A Sink Plunger And I'm Slightly Afraid To Use It

Picture by Will Powell

Dear Plunger,

There's an intersection of two areas of regulation here: public safety and competition. Unfortunately, the end result is that plumbers can, for the most part, quote you pretty much whatever they like.

The exact details vary from state to state, but the main reason why plumbing repairs are only supposed to be carried out by licensed plumbers is, as the Master Plumbers Association of WA puts it, "unlicensed plumbing and gasfitting is illegal due to the risks to public health, safety and the environment". In practice, changing a washer isn't likely to cause any issues, but messing around with sewerage lines if you don't know what you're doing could obviously get unpleasant. (Similar regulations apply to electrical work.)

As for the ACCC, the clue is in the name: the Australian Competition and Consumer Commission. While it has a major role to play in consumer advocacy, the ACCC operates on the assumption that competition is the most effective way of ensuring consumers get value for money, and many of its regulatory activities are focused on ensuring that competition is maintained. If a group of plumbers got together and agreed not to quote less than a given amount per hour, the ACCC would come down on them like a ton of bricks. But since there are thousands of plumbers in Australia, and they can quote independently, the competition process is essentially working from an ACCC perspective: there's not an immediate breach of regulations, and there's not an effective monopoly on supply of plumbers by just a handful of companies.

Sorry we can't offer more succour, but that's the reality. Finding an efficient, value-for-money plumber often takes time, and the old-fashioned approach of asking for recommendations from friends and neighbours might be your best bet. Good luck!

Cheers Lifehacker


Comments

    If the job isn't too big try using a 'Dial a Hubby' or general 'Fix It' company. My elderly mother uses them for general jobs (including minor plumbing issues) and the prices aren't exorbitant. I think the actual plumbers quote high because they just couldn't be bothered for little jobs. Why do 5 jobs fixing dripping taps when you can do a single job for the same price.

    Are you for real? What if some one came to you and said from now on your rate/salary/wage is this much because we dont think its fair? You go get a tradde and work hard all your life to gain 'experience' so you can charge more and live well. We don't need a government body telling every trade how much they can and cant charge. Look what happened to the panel beating industry of Australia, they got royaly shafted by NRMA and other insurance agencies to the point of shutting down every 2nd panel shop. People lost businesses and homes! Educate yourself before asking silly questions.

      So Educate me Alex......How does a job that would take 2 hours and use around $200 worth of parts...
      cost between $1000 to $2000 dollars.
      It's not Brain Surgery although they charge like it is. Get off your soap box we all know that it a stitch up and we just have to cop it, I would like to charge these guys the same hourly rate for the amount of time I have wasted over the years waiting for my "tradie" to arrive (that's if he turns up at all)
      I know he has to pay wages/super/fuel/etc etc

        Not too sure what you expect to pay??

        If the Plumber charged $100/hour. That's about 5 hours per day of work given that a plumber would spend probablu close to 3-4 hours in traffic.

        That's $500 per day x 6 days a week = $3000 per week. Minus any taxes, car costs, tool costs, insurances, workcover, super, GST probably an apprentice to assist with some of the other jbs he has. Plumbers dont just do quick 2 hour jobs all day. Therefore fixed costs are fixed costs.

        So he would probably walk away with about $1500 per week. That's the equivalent of about $120k per year for a PAYG earner. I reckon thats an average salary for someone who is running their own business and puts in probably 60 hours a week???

        You haven't actually explained what the issue is. I am tipping if you have had numerous quotes that ALL are around the same mark, then it is a more difficult job than you are letting on.

        My local Plumber recently cme to my house ad did this work;
        Replaced my water pipes from meter to house and to all points under the house. Pipes up walls did not require doing as they were copper.
        Moved my garden tap about 2 meters because it was too close to footpath,
        Added an outlet on ht side of the house for the Air Con to get connected to,
        Replaced a broken 90 degree bend in my sewer pipe that broke.
        Total cost $990. It took a whole day to do that and I reckon that was very reasonable.

    A lot of the work plumbers do is really gross. It needs to be pretty well paid work in order to induce people to become plumbers.
    If we start regulating their fees, there will be no incentive for people to become plumbers and more incentive for people to order non-essential plumbing work. Demand for plumbers will exceed supply and the plumbers will stop doing the more unpleasant jobs - blocked and damaged toilet drains etc.
    It'll be just like in the good old Soviet Union - you'll be able to get your toilet unblocked cheap, but you'll have to wait 5 years to get someone to do it.

      This is actually part of why their prices are so high and why tradesmen in general charge so much - part of their pay is actually classed as "danger pay". If they cut themselves while fixing your broken toilet and get hepatitis, for example, they need to be able to cover their medical costs.

      builders get it if they're working on roofs, electricians get it for enclosed / confined spaces and plumbers get it for medical infection risks.

    Google the "Grey Army".
    They're semi-retired tradies who fix all those little things around the house for you that you're not sure about doing yourself.
    They also are supposed to be quite cheap.
    This was a recommendation given to me by a friend, I've never needed the service so I've never used it myself, But I just thought I'd pass it on. :)

    Say that you're a plumber. It takes you X hours to complete a task, because you're working with hand tools. So you go out and you buy yourself a really freaking nice power tool and you can do that job is X minutes now instead.

    You go to your next job and you charge the same hourly rate, and you get 1/60th of the revenue that you would have gotten for doing it before you spent the money to buy yourself a new tool. You're not only out of pocket for the cost of the tool, but you've just cut your own throat on pricing.

    The only answer is to bump your rates. You can't bump your hourly rate because you still want to quote on that metric when you need to, but for specific jobs - you just bump the dollars to reflect the cost of your tools and setup basis. It's the only way to run a business and every plumber I know does it the same way.

    If you sell set products in IT, it's the same basic idea. It might only take you 15 minutes to deploy a new VM, run it up from your stock template, add it to your nework and monitoring and push a CMS out to it and cut a new account for it to give to your new client. But do you charge that client for a quarter hour of your time and ignore all the sunk costs that went into building your platform, building your templates, building your scripts and becoming a guru with the CMS That you sell - or do you bundle those costs into a product price that reflects how much hassle you went through getting it up and running?

    The calculation for that depends on what you can charge and remain competitive and how many units you believe you can sell. But it's still the same idea.

      Interesting way to look at it, but there has to be a happy medium. When I deploy a VM template that took me 4hours to build, I cant charge the client an extra 4hours everytime! Thats like Holden charging you $2 billion for a Commodore because thats what the factory and development cost.

    How ever you spin it, you cant justify $1000/hr labour costs. I'm a qualified Porsche and Audi mechanic, and now work in IT as a SysAdmin...both highly technical and tedious trades...and I've never been able to charge anywhere near $1000/hr, and you're saying its ok for someone gluing PVC pipes together to? A comparable trade is electrical...yet my electrician with a considerably more dangerous job charges less to run 3-phase power into my house than my plumber charges to run a drainpipe. Ludicrous. I disagree with continuing government control over everything, but if an industry cant control itself internally, and has a growing culture of overcharging, its the governments job to step in...like we pay them to do.

    I had a plumber install a gas furnace and a gas hot water system at the same time. The furnace and gas hot water system were already paid for all they had to do was install it. It took the plumber 4 hours to do the job and it cost $2500 including GST.

    It begs belief plumbers, im sorry but I had an issue with a broken tap that literally came off the metal pipe, a simple plumbers job, or so I thought. 6 phone calls, 4 couldn't make it, 1 couldn't be bothered, told me to call someone who wasn't busy, and the 1 I got, i waited 2 days, no return phone call, nothing, so im like ok, ill head down to the hardware store, Bunnings was useless, they told me (rudely), to call a plumber.

    I couldn't do it myself and moved onto the next customer. 2nd hardware store I went to, lovely bunch of guys, told them my situation, showed them a picture on my phone, and they showed me how I could fix it myself, they laughed at what Bunnings told me.

    Cost me under $40 in parts and fixed it myself, 2 days AFTER the plumber came by, knocked on the door and asked ME why i didn't call him to say that I had fixed it with another plumber, I asked him politely as to why HE didn't call me back 2 days after he was supposed to show up, then asked him to politely leave my property immediately.

    Sure im not going to touch toilets or sewerage and all, but for simple home D.I.Y. nothing beats the internet and your local hardware store, and you should already know this if your reading lifehacker :)

    Cheers

    Mario

    I'm loving these comments. Makes me want to make a rant myelf.

    I am all for charging what you can get for a job. Free enterprise, I guess. However, I am in agreeance with most of the other lifehackers who say that there is something called too much for a job.

    I have been renovating my house for the past three years. I have dealt with many tradies. What I can't abide by is a tradie who offers a price that is in direct competition with other tradies (over priced or not) and then does a crap job. This has been 9 out 10 tradies I have dealt with.

    My 2 cents is (and a very good price for my advice too) is to pay what the market allows, then ride them like hell to do a good job. Unfortunately, this makes me look like a bastard, but in the end, it is my money and my property. If I was paid a lot at my work and didn't deliver, I would get fired and shoved on the front page of the newspaper (I am a high school teacher).

    Final word, it is us as the consumer that allows the tradies to charge what they want. Regulated or not. If the customer says no, they have no job.

    Rant over.

    So tell us what the two hour and under $200 job actually is. As Plumber who works in the hardware/plumbing retail industry (yeah I laugh at Bunnings too!) I deal everyday with people who think that anyone can do plumbing repairs, but prove quickly that they haven't got a clue, and maybe even shouldn't be using a pencil let alone performing work that deals with safe containment and disposal of toxic waste products.

    Not saying the job *is* worth $2000, but without knowing more, the original person may just be someone without a clue or unrealistic expectations.

    Having said that, IME very few people are willing to pay a good tradesman what he/she is worth and so the slack-o tradies out there continue to get work because they are cheaper, or people just put up with shoddy work, and those tradies who are trying to build a clientele and *are* good end up selling tap washers on a Saturday morning instead.

    Plumbers charge that much because people will pay it. Most Australian businesses work the same way I've found. In the beginning they'll charge a low price to get business and turnover. As they approach capacity they increase prices 25% and are still too busy so they increase prices again and again until the demand drops and they are almost fully utilised. Plumbers (generally) aren't stupid, so would rather work 30hrs a week at $250 an hour than 60 hrs a week at $125. It's all about supply and demand. Once the building industry slows down enough, the rates will drop in half.

    Danger pay, I love our society now days, it’s great... There is absolutely no rocket science in every day home plumbing what so ever and there is also no reason for most tradies to charge what they are asking for in recent years, it’s honestly pathetic but when a government regulates to install something as basic as an outdoor light and you need a ‘sparky’ to do it, its just crazy and is one of the reasons why they can charge what they do because it’s become a necessity service and you need a piece of paper to say you are allowed to... I’ve been doing my own plumbing and electrical work for many years and it’s common sense to keep safe and do things right... It’s not at all hard by any means so I’m with the majority on this one... CARZY TIMES and hopefully tradies get a wakeup call on reasonable pricing but unfortunately I can’t see it happening any time soon though.

      You obviously have NO IDEA! You must work at bunnings or something. There IS a reason it Takes 4 years to complete a apprenticeship.

      P.S. - Give me your address so i can report you to the PLB and Department of Energy Safety,

      You probably have no idea what that means? Do you?

    all my mates are tradies, it costs me wholsale price for product and a carton of beer for labour :)

    I put up with a leaky tap for 3 years because after years of dealing with tradies to renovate our home I was sick to death of most of them (not all)and their rip off prices and terrible workmanship.Of all the trades though I found plumbing bills to be the most outrageous and hard to swallow. Today I had no choice but to call a plumber as that leaky tap had become a steady trickle. I was charged $600 for less than an hours work (the tap was also supplied in the price). But I failed to check the work properly before paying as I had 2 young children to deal with. The result...I was provided with a tap that is unacceptably scratched and my new tap has a slow drip. I am a degree holder and work damn hard for my pay and my degree. This bill would take around 20 hours of work to pay off.

    Do you have any idea of the overheads involved in running a plumber business that hourly rate incorparates the running of the entire business not just pure profit Fuel, Maintenance/wear and tear on work vehicles if lease vehicle repayments on that not to mention insurance for the vehicle and its rego, advertising; yellow pages internet pages, sign writing used to bring in business, insurances, electricity for business premises, rent for business premises, down time to keep the business afloat in quite times, Accountants, licensing fees, continuous courses there required to complete to be able work with new materials brought out every second week, office material; computers, printers, phone bills, pens paper etc, allow for 4 weeks annual holidays, public holidays, work clothing, and if you have an apprentice you need to pay him his weekly wage & when he's at tafe and his holidays sick days insurances public liability what if you get sick and cant work the bills don't just stop you need to allow for that also and the list just keeps going and after all this then you need to acuatlly need to make a living then comes your wage, if only it were as you made out every plumber makes 100% profit.
    It takes 4 years doing certificate III to become a trade certified plumber than a further 2 years to doing certificate IV than there's multiple extra courses for particular TMV valves, backflow prevention devices and so forth. I hope this has enlighten some of you out there

      Last week I paid $192 for a plumber to fix a leaking loo. He was there about 10 minutes. It wasn't fixed - kept leaking from that same night. I had to call them back - they're charging me another $100 for a valve, and another $175 call out fee! I think that's ridiculous. Fix it right the first time!

    why the rant on plumbers?? are u all quite happy to pay your local dedicated car service agent his fees for having an apprentice service your car?? how about your dentist? or maybe your doctor ? there are many costs involved with business and untill you have had your own and been through the crap that goes with it , pay up!!

    Im a plumber. Im no millionair. Ill tell you straight up that I charge more than the 75 dollars per hour you were quoted to do your job. The majority of poeple that either complain about my invoices or sit there and tell me (whilst I climb into their hot ceiling space or put my hand in their S*%t) how rich I am, live in houses nicer than mine. I f i had a dollar for every person that asked me why something costs so much I would be a millionair. It pains me how much of my time I spend explaining and justifying or adjusting my invoices to appease halfwitted types that are seeminly educated. I have to comply with umpteen levels of licensing and registration and insurance. Every year some bureaucrat justifies his employment by creating another hoop for some silly prick like me to jump through. I spend my every waking hour (or even sleeping hour for that matter) answering phone calls. I quote the same retarded impracticle prick 3 times over on the same job because he has changes that he wants to make because he basically CANT AFFORD WHAT HE WANTS. plumbers arent expensive. plumbing is. Time and time again I get customers telling me "oh I didnt realise what a big job this was" when they finally see the job unfold. I have to pay rediculous wages to young upstarts that are born in a time when they are lead think a job is a birth-right and cant even spell let alone run a job. You dont give a moments hesitation to paying your GP 80 bucks for 10 minutes. He has rent and a light buzzing above his head. I run a truck, phones, insurance, accountant, office staff, licensing and carry a huge amount of equipment and stock. If your job will only take you three hours do it yourself and do us tradies a favour and leave us alone. A quote is a quote. if you really want a good deal, dont be a tight arse and ask for an hourly rate and watch the guy work. I am a reputable trader and have many referrals and a good reputation. The suggestion of the ACCC dictating to me how I operate offends me utterly.
    Your comments sicken me to the core. Go back and have think

    Aaron so well said!!

    I had a different plumber in than my usual fella due to him being too busy . Mistake I made was not asking hourly rates etc. I had my bathroom finished off, connected bath and basins and toilet . All was there, just needed it all connected. I worked with the guy and his 2nd year apprentice . ( I'm a builder by trade) . Anyway we finished the job in a day. I was happy , 2 days later bill in the mail ...... 2000.00 , that was 200 in materials ( I supplied most of materials) , and 800 for 8 hours for apprentice and 1000.000 for 8 hours work for boss. My usual plumber charges 55 hour , he is a fantastic plumber fairly priced ... My fathers a builder and runs own business , they only charge 50 per hour ... And they do a hell of a lot more work then a plumber ! I really think that plumbers are over charging ! Sick of hearing the tools, super, car etc excuses !!! Builders do that too , yet they don't charge through the nose! I'm just peed off that 8 hours work is 1800 bucks plus parts ... You don't even get that working in the mines for Pete sake!!! Anyway I'm venting my frustration and stupidness employing an outside plumber to do my job! Rip off!!!!

    Hi all
    If you work rural you have to ensure continued business.
    if you work city like Sydney you can take an attitude of there is 4 million people in the city so I will do set pricing and you will normally not get any return work because the price is so high relying on massive advertising and marketing.
    working in Sydney and a lot of major regional areas and cities is becoming harder due to down time re travel.
    If a licensed plumber who has taken six years just to be qualified (same as a doctor) practices he has to do at least 35 hours of productive work a week at $90 an hour to produce an income (gross) of about $126,000 per year. This is without driving time and then accumulates to possibly 60 hours a week

    Sounds good but this unrealistic because you cant ensure 100% constant work and that's a single plumber without advertising. word of mouth takes approximately 5 years of good service and recommendations. 1 good job gets you 2 good references. 1 bad job gets you 10 bad references.
    all plumbers in their apprenticeship learn how to do a charge out rate.
    This has always been very accurate which means that at that rate a plumber is really only taking home $52.50 per hour and base on a 40 week year. Not so good.
    I don't normally jump on the internet much but doing a little homework I have found a good website called plumbing cost or plumb assist. Seems to make things for the consumer a bit clearer.
    http://www.plumbingcosts

    Unfortunately there are in every industry people that take advantage.
    as I read today word of mouth and checking references is the best.

    I recently was billed nearly $3000 for a job that took 6.5 hours (not sure if he took a lunch break as I was not there) after calling to discuss overcharge, initially they claimed I accepted their quote; I didn't get a quote whether it was verbal or otherwise. I merely accepted them to complete the job once I was informed by the caretaker of the builing in which the leak was identified. I assumed I would be billed at an hourly rate (as before) which was $99.00 +GST as they had previously fixed the leak (the same leak!).
    I also find I am charged for a pressure tester ($120.00) ...isn't that a tool that the plumber should already possess?, Anyway - not so concerned about the cost of materials or this tool, but the labour was for 24hours! - After I called to quiry this, I am told that there was an offsider (which I wasn't aware of in the first place, and that he was also a qualified plumber) this left me a little more puzzled as the job did not look like it needed two people to complete. Anyway, double 6.5 hours and you do not get 24 hours billed.

    I am still waiting for the updated billed as discussed, if I am not satisfied I will be taking it to QCAT, as I smell a rat here. I have already checked with MPAQ (not a member - deregistered), then QBCC (nothing they can do about it it is a billing complaint).

    There should be a regulatory body that monitors plumbers (through a regulations or laws) and a complaints body within it to keep them honest! Clearly some need checking and maintaining.

    BTW - do people know about the law arround plumbers having to provide a written quote for any work they complete. This apparently came into affect in July of 2015 - for all building works - as informed by QBCC. Other builders, etc are required for any work over $3,500.

    Last edited 06/03/18 8:34 pm

    Plumbing is a very loos term today.I am and mechanical/ type B gas Plumber doing industial and commercial Gas, hydronic heating, solar thermal, co generational power ,steam ,chillers, combustion analyzing,water quality etc. You need 6 years schooling and then electrical training at 2 levels, and 5 levels of advanced gas training. All fault finding is electrical plus mechanical fault finding on pumps, seperators, fans, valves, diverters, stats, ntc, list goes on.My boss is an mechanical plumber/electrician and does instrumentation as well. We do the whole plant room set ups , bms systems , electrical. The is all different levels of plumbing ,years ago i studied civil engineering and what . People this days think that they go to university and are so so so much smarter then trade workers, bla bla bla get some real life expariance.
    Plumbing is not a 9-5 sit in your chair and go for lattes and avocado on toast job, we work hard

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