ICA urges NT to ditch ‘regressive’ stamp duty
The Insurance Council of Australia (ICA) wants The NT Government to scrap insurance levies as it looks to improve its revenue base.
ICA says such levies generally penalise consumers who take out insurance and exacerbate underinsurance.
“The regressive nature of insurance stamp duties is an important equity issue for policymakers,” it says in a submission. “ICA therefore strongly submits that the interests of NT would be best served by abolishing its insurance duties.
“A broad-based property levy, subject to safeguards as to its impact, is a more economically effective and equitable method to fund the NT Government.”
A property levy would encourage take-up of insurance, and is a more efficient and certain way of collecting revenue, ICA says. Victoria, SA and WA have shown such reforms are feasible, all moving to fund emergency services through broad-based property levies.
The NT Government collected about $768 million via taxes and royalties last financial year, including $43 million from stamp duties on general insurance policies, according to a discussion paper.
Workers’ compensation, life cover, private health and freight and commercial insurance are exempt from the duties.