Bush pays for CFA levy blow-out
weeklytimes now, 16 January 2009
Victorian farmers are paying far more in fire services levies than city businesses serviced by the Metropolitan Fire Brigade.
Farmers, many of whom are volunteer firefighters, pay fire service levies of 63 per cent on their property insurance to fund the Country Fire Authority.
In contrast, businesses within 16km of Melbourne's GPO pay a levy of just 48 per cent to fund the MFB.
The Insurance Council of Australia says regional Victorians are paying more in levies due to a skyrocketing CFA budget.
Insurers must collect the levy to fund 77.5 per cent of the CFA's budget, which has blown out from $158 million in 2005-06 to $230 million for 2008-09.
ICA economics and tax spokesman Alex Sanchez said the insurance industry wanted the Victorian Government to dump the levy and move towards a rates-based system similar to that used in Western Australia.
"In Victoria you have 50,000 (households) that don't pay anything because they're uninsured."
"We believe it's important to have well funded emergency services, but it has to be funded sustainably and equitably," Mr Sanchez said.
For each $1000 of premium farmers and country businesses pay to their insurers, they must also pay a terrorism tax of $20, a fire services levy of $642, GST of $166 and stamp duty of $183, bringing the total to $2011.
Nationals Member for Benalla Bill Sykes said the Victorian Government must find a more sensible system for the collection of revenue to fund the state's fire services.
"Queensland, South Australia, Western Australia and the ACT have all abandoned premium-based levies because many households and businesses escape their obligations by way of under-insuring or not insuring at all," Mr Sykes said.
"The current system penalises people who insure adequately."
"Our policy is for there to be a property-based levy, which works very well in Western Australia."
A spokeswoman for Emergency Services Minister Bob Cameron said there was no plan to change the current levy system.
The Victorian Government has repeatedly refused to adopt a different collection system.
In 2002, then Treasurer John Brumby commissioned a report into the levy, which found a rates-based system would be costly and potentially detrimental to property owners.