Fire insurance taxes unfair
BRW Letter of the Week, 22-28 March 2007
It’s good to see BRW drawing attention to taxes on insurance premiums (“State insurance taxes a burden on business”, BRW, February 15), because it is a subject that the relevant governments would prefer remained well off the agenda.
But the fact remains that New South Wales, Victoria and Tasmania are ignoring the benefits of switching fire-brigade funding to a more equitable community-wide base, and that all state and territory governments impose stamp duty on top of levies and GST.
This means that Australian businesses are paying world-record rates of tax on insurance premiums, with many unable to protect their assets and livelihoods properly in a world of increasing risk.
Insurance brokers are also concerned about efforts by some governments to extract the maximum amount of revenue from business, ostensibly to fund firefighting services. The Victorian government, for example, passed legislation without consultation last year to impose a levy on businesses that choose to carry a portion of the risk themselves.
This “deductible” is a normal practice in insurance, but the Bracks government sees it as an attempt by companies to avoid paying part of their fire-services’ levies.
It will be interesting to see how the Victorian government finally implements this legislation, because insurance brokers believe that an administratively efficient system based on this new law is impossible.
This one “hidden tax” will cost large companies operating in Victoria hundreds of thousands of dollars.
If readers would like to know more about the taxes that inflate their companies’ insurance premiums, they can visit www.niba.com.au/tax to see what they can do to help bring about change.
Noel Pettersen
Chief Executive
National Insurance Brokers Association
Sydney