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TAX CRUSADER
Loss adjuster Allan Manning maintains the rage over taxes on premiums
Insurance & Risk Professional, December 2006

Many organisations have had their say about the tax burden on insurance in Australia. NIBA, for one, is running a campaign and has vowed to keep up the pressure on the Victorian, New South Wales and Tasmanian governments in particular.

All three impose a fire services levy on insurance buyers, which added to stamp duty and GST makes Victoria the most taxing place in the world for policyholders.

It is something Victorian loss adjuster Allan Manning is determined to have changed. He has launched his own campaign website – www.notaxoninsurance.com – in a bid to create awareness among the general public as well as those with a specific stake in the industry.

“At every measure it is an unfair tax,” he says about the fire services levy. However, the effect is even greater when subjected to the GST and then state-based stamp duty. The net result is that insurance buyers in country Victoria pay almost 90% in government charges on every premium.

By contrast, a standard insurance premium in California attracts only 2.4% in extra government charges. 

Dr Manning, whose LMI Group hosts the protest website, says he first noted the inconsistencies when researching rates of underinsurance for a PhD thesis. He says the higher costs on insurance are a clear deterrent for many prospective buyers, and that affects the wider economy, with many enterprises steering clear of business interruption insurance altogether. When such businesses fail – unnecessarily – the whole community feels the pain.

He launched the website in April and is taking the issue to the public wherever and whenever he can. That includes public speeches with groups like Rotary and Lions. He has even managed to sit down with members of the Victoria Police Arson Squad to explain the issue.

“Everyone understands the logic of where I’m coming from,” he said.

And the logic is clearly spelt out on the website. It features a host of tables showing the tax effect in each state and territory and comparisons with other countries. He also notes insurance in Australia tends to be taxed as much as alcohol and tobacco. Although those “sin” taxes may be seen as reasonable, insurance should be encouraged rather than taxed as something undesirable.

Dr Manning also exposes some of the myths surrounding the debate, particularly the idea that his position is against the fire brigades. He says fire services are a vital asset for Australian communities and should be funded more equitably.

The website contains a petition (with 5000 virtual signatures to date), links to the NIBA campaign website and news articles on the issue.

He says he has received plenty of support for the campaign. The next task will be to combine with like-minded parties to create a single avenue of protest. “There are a lot of individuals right now, but we are struggling to get one voice.”

With the Victorian election complete, the next targets will be electors in NSW, which goes to the polls on March 24 2007.