4.7 Qualitative costs
This section outlines identified costs to PCBUs , government , workers , consumers and the community that have not been quantitively costed in this analysis .
4.7.1 Qualitative costs to PCBUs 4.7.1.1 Engineered stone PCBUs Identified but non-monetised potential costs for engineered stone PCBUs include : �
Licence fees : While jurisdictions may make a policy decision to recover some of their costs through a licensing fee ; cost-recovery via licence fees was not considered in this analysis to avoid doublecounting .
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Reduced revenue : Engineered stone PCBUs may experience a reduction in revenue as they pivot to alternative products or as a result of business closure . 8 The time required to develop and implement legislation is expected to allow engineered stone PCBUs to fulfil existing client orders , build up their business in natural stone or alternative products , or find alternative revenue sources , reducing revenue loss .
Other transition costs : Engineered stone PCBUs may incur other transition costs such as costs of disposing of old stock , costs of dealing with contractual issues for scheduled work and additional costs to change their designs , productions , pricing , and / or marketing for alternative products .
Retraining workers to work with non-stone products : There may be some training costs for employees to work with alternative products ( e . g . laminate ) or to recruit skilled workers .
Higher barriers to entry for new businesses : There is expected to be a small increase in the barrier to entry to working with engineered stone under option 3 due to additional costs associated with licensing requirements . The financial burden is expected to be larger on sole traders and small businesses , as they have fewer economies of scale in which to absorb licensing costs . Depending on market competition , additional costs would be expected to be passed onto consumers .
4.7.1.2 Other impacted PCBUs The following impacts to the engineered stone industry have been identified but not quantitively costed : �
Costs to importer / distributor / wholesale businesses : There are a small number of businesses who import engineered stone and supply it to fabricators ( estimated to be around 12 companies 9 ). A 2019 report suggested that 77 % of Australia ’ s engineered stone was supplied by 3 – 4 companies ( Australian Engineered Stone Advisory Group , 2019 ). While it is not possible to determine exact numbers , it appears that up to 4 of these supply companies are large multi-national companies who also manufacture engineered stone and other stone or stone-like products . The remainder are locally owned companies who import engineered stone from overseas manufacturers . Based on the limited information available , it appears that the companies importing and supplying engineered stone do not undertake fabrication themselves .
Very few of these companies made a submission to the public consultation , and no information about business size or financial turnover was available . The submissions from these companies
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Based on submissions to the consultation , the average revenue of an engineered stone fabrication business is $ 900,000 per annum for sole traders and small businesses ; and $ 8.3 million per annum for medium sized businesses .
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Caesarstone consultation submission
DECISION REGULATION IMPACT STATEMENT Prohibition on the use of engineered stone Page 44 of 107