To be entitled to a trade licence means that the contractor has had to undergo an assessment of sorts via an education or training institution and has had his or her skills competently assessed by a trainer or assessor. This is important to you as the consumer, as you need to know whether this person or company are knowledgeable and competent enough to carry out the works adequately and to a suitable standard. If they are not, you are throwing away your money.
The other problem is in relation to compliance and regulation under NSW law. If the contractor does not hold a trade licence, the likelihood that he does not hold valid Workers Compensation or Public Liability policies is also a strong possibility.
That affects you directly in that if a worker was injured or killed on your site, you could be implicated as you were the individual authorising the work to be carried out, and as a result an incident occurred that should never have been allowed to proceed.
As a consumer you must demonstrate due diligence by requesting to see the contractors licence and all relevant insurances before safely engaging them to carry out work on your premises. This protects your consumer rights and reduces any risk you may be exposed to.