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Fire services levy (FSL) increases by the Victorian and New South Wales Governments will add to the problem of underinsurance in the community, the National Insurance Brokers Association (NIBA) said today.
NIBA Chief Executive Noel Pettersen says the decision to increase the levy is an unfair burden on struggling policyholders already hurting from severe weather and interest rate rises over the past few months.
“In these tough times, such taxes further discourage policyholders from protecting themselves and their property with insurance.
“Now insurance buyers are again being forced to underinsure, or worse, eliminate insurance altogether.”
Mr Pettersen says the tax hikes have hit commercial policyholders in both states hard.
Country Victorians now pay 55% FSL (up from 52%), a mark-up of nearly 90% on their base premium including GST and stamp duty. This is compared with 38% in New South Wales – up two percentage points from the previous 36%.
This is the second increase in these taxes in three months.
“Victorian and New South Wales insurance buyers are already charged world-record taxes.
“Taxing insurance products is an antiquated and unfair system that allows people without insurance to avoid funding the state fire services.”
New South Wales, Victoria and Tasmania are the only states not to adopt a property rates-based system to fund their fire services.
ENDS
For further information contact Noel Pettersen on 02 9459 4300 or visit www.niba.com.au/tax/html/
NIBA is an independent industry association representing 500 firms and more than 2600 intermediaries, who handle almost 90% of the commercial insurance transacted in Australia. Brokers play a major role in insurance distribution, handling $10 billion in premiums annually and placing around half of Australia’s total insurance business.