Another fire insurance tax hike unfair, say brokers
NIBA Media Release, 1 July 2008
The National Insurance Brokers Association (NIBA) says the Victorian Government’s decision to further increase fire services levies (FSL) on insurance premiums, is making insurance a luxury for many households already struggling under the weight of fuel prices and high interest rates.
NIBA Chief Executive Noel Pettersen says the changes, which came into effect today, will add to the cost of doing business in regional Victoria, with commercial policyholders paying 58% of their premium direct to the FSL. This latest 3% rise is the third successive rise since December.
This means that for every $100 in insurance cover a regional Victorian business buys, it will pay an additional $91.18 for the FSL, GST and stamp duty.
“It is an outrageous situation when policyholders are paying a mark-up of more than 90% on their base premium due to ever-increasing levies and stamp duty – as well as GST,” Mr Pettersen said.
Metropolitan businesses now pay 48% – up one percentage point from the previous 47%. The levy for householders in country Victoria is now 24%, up from 22%, while rates on metropolitan homeowners have moved from 19% to 20%.
Mr Pettersen says the decision to increase the levy yet again will put insurance cover further out of reach of small business owners and households, forcing many to underinsure or even forsake insurance altogether.
The increase comes as the Federal Government begins a wide-ranging review of insurance taxation.
A recent New South Wales Government Independent Pricing and Regulatory Tribunal (IPART) draft report has identified stamp duty and fire services funding contributions as the least efficient state taxes.
It recommends insurer contributions to the fire services be replaced by an equivalent increase in contributions by local councils through property rates.Victoria, New South Wales and Tasmania are the only states not to adopt this system.
ENDS
For further information contact Noel Pettersen on 02 9459 4300