Related ArticlesReport: Victoria has the world’s highest level of insurance taxes!
Frankston Times, June 2009
Victoria has the world’s highest level of insurance taxes, according to a discussion paper ‘What you need to know about taxes on insurance’ released by the National Insurance Brokers Association (NIBA). New South Wales is a close second.
“We are trying to show insurance buyers that high levels of tax on insurance are a major disincentive to insure,” NIBA Chief Executive Noel Pettersen said. “We also demonstrate in the paper how New South Wales and Victoria are using taxes on premiums to pay for emergency services that the entire community should be paying for.”
Mr Pettersen said the recent Victorian bushfires had revealed that up to a third of the destroyed homes had no insurance or were underinsured. The industry believed affordability is a factor.
“When up to half the cost of insurance is going in tax, you’re going to always have an affordability problem.”
He said the reduction of taxes will only come when the community demands it.
“It’s up to us as insurance brokers to provide the evidence that triple-level taxes on insurance are discriminatory and unnecessary,” he said. “Insurance is being taxed at the same level or higher than alcohol, tobacco and gambling, and if we don’t push for change it’s just going to get worse and worse.”
In the past few years, a royal commission, two state government reviews and a number of commissioned studies have recommended insurance taxes be reduced or removed and the fire services levy be replaced with a levy on council rates.
Mr Pettersen said other states have already switched to a fire services levy system based on property taxes, which has resulted in much lower insurance premiums.
“But New South Wales and Victoria continue to load down premiums with increasing levels of tax. And they’ll continue to grab as much as they possibly can until the community tells them to stop.”
Further information on this issue is available online at www.niba.com.au/tax.