split system air conditioners

Installation costs - what if Industry was returned to a monopoly?
ARMA attempts to grab entire AC market
     
Prelude :

In January 2016 on behalf of ARMA members, Ms Kim Limburg wrote to the Minster for the Environment, The Hon Greg Hunt MP, Minister for Education and Training, Senator the Hon Simon Birmingham and ASQA, including a petition signed by over 1,000 members urging government to abolish the 7-week part time Cert III course in Refrigeration & Air Conditioning. Her complete text is attached below in PDF for your reading. The goal of the petition was to put the split system air conditioners industry back in the hands of refrigeration mechanicsa only. As a monopoly. The results – if the ARMA were to be successful – would be the doubling of air con installation costs in Australia overnight.

Who here remembers what service and standards were like when we had only one service provider for telecommunications in Australia? Pay phones, long distance, wiring, installation, PABX, wireless, you called only one company. Efficency and value for money were at an all time low. The standards of service the Australian public received can be summed up by the Kevin Boody Wilson song ‘You can stick that f***n phone ….. you know where.’ 

Kim Limburg and the ARMA want the government to legislate them into ownership of a monopoly of split installations Australia wide. I wonder why anybody would po$$ibly want a monopoly?

Other Australian tradesman disagree with Kim Limburg, the refrigeration mechanics and their attempts to grab the entire split market and keep it for themselves. One such opposing statement was sent to the Education minister :

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kim Limburg lies to bolster her position

 

To whom it may concern,

                                          It has come to my attention that a certain Kim Limburg of the only recently formed and relatively minor organisation the ARMA has written to you to ‘demand’ that action be taken to remove the certificate III in split system installation which allows suitably qualified similar trades to install split system air conditioners for customers in their own premises.

This Kim Limburg person alleges that sub-standard work and / or  misleading, inaccurate advice is being given to consumers by those in this line of work who aren’t qualified refrigeration mechanics. Her organization wants a return to a monopoly of this market and only allow trade qualified refrigeration mechanics to install split system air conditioners. She makes several farfetched, incorrect and exaggerated claims in the letter to the ministers quoted below :

“The graduates of these quickie courses are often so unfamiliar with trade-level air-conditioning and refrigeration competencies that it is not unusual for trade qualified air-conditioning and refrigeration mechanics to be called out to fix their work. On attendance at these jobs, ARMA members and their trade qualified colleagues have seen incorrect repairs, including unsafe or misdiagnosed wiring, and poor workmanship. They have also seen oversized or undersized systems installed, unnecessarily increasing power consumption and defeating the purpose of star ratings, which is used by many consumers to decide which air conditioning unit to purchase.

This is a disgraceful situation and must be stopped. Australians deserve better than to waste their hard-earned money by under-trained operators incorrectly installing and then illegally repairing their air-conditioning and refrigeration units, promising warranties they can’t provide”, Ms Limburg said. According to Ms Limburg, apart from the dangers and poor workmanship these courses impose on consumers, they have had a devastating impact on properly trained trade-qualified air-conditioning tradespeople, many having had to close their businesses.”

While at a glance, some of these claims may appear to be based on actual events, I would reject the idea that this is happening any more often than when refrigeration mechanics were the sole trade allowed to do the installations. I am a trade qualified, licensed Electrician and Electrical contractor with a Cert II in splits obtained some 5 years ago. It is common for myself and our installers to go to jobs where the previous installer (allegedly being a trade qualified frigy) has done exactly what Kim has outlined above as bad workmanship. Sometimes worse.

What adds insult to the consumer is that when refrigeration mechanics had the monopoly, they knew that the demand for their trade was so great during the hotter months that basically any frigy with a spanner and a ute could install split systems, charge enormous amounts of money and stay in business despite poor workmanship or customer complaints. The majority of frigy’s did fine work of that I have no doubt, but by keeping it as a monopoly, the rogues are difficult if not impossible to remove.

 

Competition always produces better results

 

By opening the industry to more providers – market conditions will dictate that consumers have a choice of providers, lowering the price and at the same time lifting the standards. When more people are offering the service, the result is always higher standards and better value for money.

In every industry there will be smooth operators as well as rogue agents and inferior service providers. The ‘trade services’ category is no different. Market conditions are difficult enough, and repeat business is the only way for most Australian organizations to stay profitable. People unhappy with their work are often a lot more vocal than those who are content.

There is no consumer benefit to returning split system installation as a monopoly to refrigeration mechanics alone. There is no safety benefit. There is no cost benefit. There is no service or standard benefit – the only group to benefit from this change would be refrigeration mechanics themselves.

I believe this Kim Limburg person is seeking this change in legislation not in the interests of the Australian public, but in her own interests, and that of the men she represents.

I would also submit that since the opening of this market to other trades we can see concrete evidence of every claim I have made above. Costs to consumers have dropped significantly. The install that cost $750 in 2012 now costs $450. All the items that used to be classed as ‘extras’ are now included. The need to maintain higher and higher standards of installs has jumped as every person now has a camera and Facebook. Shoddy work rarely escapes the public’s attention. Customer service standards have increased substantially. The consumer who could only call a frigy before can now call a plumber / electrician / frigy or lay person certified by 6-month course to install or advise on what is required.

Quite often in my experience it is this last category of previously unskilled providers who strive the hardest to maintain high install standards and customer satisfaction – precisely because they have no other trade to fall back on. If their split system business fails, they fail. Costs can be enormous.

In any industry and this one is no different : those who do not meet the expectations of the customer don’t last. It is the market that should dictate who succeeds and fails. The government designating one group of men as the only ones capable of delivering a service can only push costs up.

I believe that the best way to serve the interests of the entire Australian community in any industry – not just this one – is to allow multiple service providers competing to deliver the best product at the best price using the best method to all consumers. Only through competition can any man or industry achieve the best results. Only though competition can the Australian public be assured that it is getting the value and specialist knowledge that they are paying for and deserve. This has been proven true in every field of business and human endeavour.

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split system air conditioners installation submissions

 

Some supporting evidence I would present to the interested parties in relation to this matter :

  • The product itself is very simple in concept and requires trade skills that any plumber / cabinet maker / electrician / frigy / carpenter has to install it neatly and exactly as per manufacturer specifications.
  • The appliance comes nearly completely assembled from the factory. All that is required is to connect the two parts and apply power, while maintaining certain standard design practices such as excess condensate water flows downhill.
  • The instances of poor installation or incorrect advice have not been shown to have increased since the industry was opened to other trades.
  • The average cost of split system installation for the average Australian consumer has dropped by a minimum of 20% across all aspects of installation. Small units were costing $500 + electrical are now costing $450 all inclusive. Larger ones $800 + are now on average being installed complete for $600.
  • The quality of the installs has increased. This is evident by the standard of work being displayed on company’s websites. The unit that used to sit on uneven concrete slabs in the garden are now supported by specific made brackets that keep it off the ground and straight. This is becoming the standard install – where as it used to be an extra of up to $100.
  • We submit that the refrigeration industry had been unable to keep up with demand for skilled men to do installations, and as such had lost part of its authority over this market. Had they not been charging ridiculous sums of money during the busiest season for what is essentially only a few hours’ work, then the sole right to install these units would have remained with them.
  • Many sales staff, websites, blogs and printed materials offer the consumer accurate information as to what size air conditioner they require. Even then, every installer we employ and all others that we know if asked to install an incorrectly sized machine for a customer would refuse. At least then the customer still has the chance of changing the system or getting a refund or credit on their purchase. Once out of the box, many retailers won’t accept it back. Especially not once it’s been installed.
  • If we take a customer’s phone booking and arrive to discover they had no idea and the machine isn’t suited to that location, we will again refuse to install, and tell them what is required. If an agreement can’t be reached, we simply move on to the next job. We know of very few men in this trade unscrupulous enough to do the install and take their money anyway. Overall the industry standard is very high.
  • The gas used to cause the temperature variation and be at the heart of split system A/C –  in the case of r410 has been specially engineered to be non-toxic, non-corrosive and not dangerous or detrimental to the ozone. In the case of r32 the dangers are marginally increased but barely enough to raise an eyebrow. R32 is only flammable under the remotest set of circumstances, one would be more likely to win the keno jackpot than cause a fire or explosion.
  • The previous (harmful) r22 has been all but eliminated for use in Australia anyway
air conditioner gasses not dangerous

 

When the above last two points are considered and put to task, the only conclusion to reach is one of less regulation of these two gasses. Why are refrigeration mechanics the only trade to be worthy of buying this product? MAPGAS – a far more dangerous welding concoction is freely available to drunks on the way home past the hardware store.

Facts not lost on Ms Kim Limburg who frequently alarms the public with false claims of the ‘incredible dangers’ of r32 to the consumer. In her attempts to fearmonger those without knowledge of how refrigeration gases work, she has used phrases such as ‘I hope to god they aren’t installing r32 units and putting themselves but more importantly the Australian public at risk’

We challenge Kim Limburg to explain how the Australian standards council, the senior engineers at Fujitsu, Panasonic and Daikin, International air conditioning regulators all saw fit to approve r32 as a refrigerant gas. While Ms Limburg who has yet to present her qualifications in chemistry or physics screeches to all and sundry that only refrigeration mechanics should be allowed to handle such a diabolical substance. The dangers of r32 are no greater than r410 and Ms Limburg is cynically uses the remote possibility of r32 combustion to advance an agenda which only restores a lucrative monopoly to her industry.

 

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air con installers capable of electrical connection

 

On the reverse of that, it is also common to see refrigeration mechanics connecting their equipment illegally to mains power and misleading the consumer into believing that they are qualified and licensed to perform this work. The frigy’s have no problem moving into our area of expertise when it suits them. But they seek to bar others from a task that isn’t even slightly as risky.

Instead of making a heap of frigy’s potential criminals : I submit here that Frigy’s should be allowed to connect their split system air conditioner into any local circuit providing the end result meets the standards of AS3000. Their TAFE covers the same principals and safety checks during their restricted electrical ticket. I have close working knowledge of a handful of frigy’s and despite them being not as tough or handsome as electricians, the standard of their electrical work is on par with qualified sparks. Plumbers should be allowed to connect in their hot water. Minor adjustments like this would make a substantial difference to the price of a whole heap of services across the building trades all over Australia. Switchboard work should be left to the electricians but if we permitted Frigy’s to connect their splits and Plumbers to connect their hot water cylinders we would :

  • level the playing field
  • reduce costs to consumers
  • save thousands of man hours across Australia every day

conclusion

In regards to split system air conditioners : I would submit to the minister, and relevant parties that the best interests of the Australian public are served by allowing :

  • even more suitably qualified people to install these for end users.
  • Removal of the restrictions on purchasing inert refrigerant gas r410a and r32
  • Examination of regulations regarding connection of appliances to mains supply by suitably skilled alternative trades
  • Australia wide strength, confidence and fitness program aimed at refrigeration mechanics who suffered withdrawal and depression when they witnessed the superior trade skills held by Australian electricians. Let’s help get frigy’s back on their feet

 

Any further information or supporting evidence you require can be provided by me on short notice simply contact me at the above address or email.

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author’s info and motivation

I believe I am in a unique position to make informed comment on this matter being an Australian tradesman of nearly 20 years. A qualified electrician and an installer of split system air conditioners. It could be stated correctly that we have a vested interest in keeping the market open as a large section of our work is installing split system air conditioners. As a matter of record, I am stating that openly to any party reading this letter so they know our motivations. However even as an outsider looking in, I would still hold the same position I do, thought I might not be as motivated to contribute to the debate.

Our Small – medium business employs up to 10 people at peak times, though on average through the year only 6 including myself. We installed over 180 split systems per month from September 2016 to March 2017. We install in all kinds of buildings homes and bizarre places. We have not a single customer anywhere in Australia who can say the air con we installed is no longer working. *

  • * that we know about
  • * that has been used under normal commercial or domestic conditions
  • * since 2007 (when we started while working for another contractor)

Our standard of installation is available for all to see on our website and social media. I am certain anybody fair of mind can see for himself that our installs are not only as good as refrigeration mechanics but often better. Consistently better. The idea that frigy’s frequently need to come behind (anybody’s) installs and fix them up due to poor work is simply a fantasy.