Policyholders hit with an extra tax
Daily Advertiser Wagga Wagga, 25 November 2008
Insurance policyholders will be forced to pay taxes of up to 40 per cent on their premiums to fund the State Emergency Service (SES).
The SES levy has received little attention after being introduced in the state’s mini-budget earlier this month, but will push residential insurance policies up by a further two per cent, or an estimated $10 annually.
The tax will be on top of the 19 per cent NSW Fire Brigades and Rural Fire Service levy insurance consumers already pay.
For every $100 worth of premiums, policyholders now stand to pay $45.54 extra in taxes.
Emergency Service Minister Tony Kelly said the levy would ease a burden on the State Government by providing an estimated $39 million in the first year.
However, Peter Brown from Wagga’s Peter L Brown and Associates said while the SES provides a vital service, policyholders should not be singled out.
“The SES turn up and do a lot of work and save insurance companies in claims … but still the SES is a community service to serve the whole community, so it should not be funded by a section of the community,” Mr Brown said.
“It is totally unfair to put it on to insurance policyholders.”
President of Wagga’s branch of the Association of Independent Retirees John Harding fears the extra cost could lead to people not taking out a policy.
“It will obviously become another cost, not only for the house you live in but any investment properties you have,” Mr Harding said.
“It is one more reason not to take out insurance and gamble on it.
“We would not want to see anything that encourages people not to take out an insurance policy.”
An estimated 25 per cent of home-owners do not have home insurance.
The SES levy will come into effect on July 1 next year and will work the same as the fire levy, where the insurance industry, local government and the State Government all make contributions.