Federal Assistant Treasurer Michael Sukkar has called on the Queensland Government to abolish stamp duty on insurance policies to counter rising premium prices in the state’s north.

As insuranceNEWS.com.au has reported, Mr Sukkar met with insurance CEOs in Townsville last week at which agreement was reached to develop a list of mitigation projects and investigate a government-funded cyclone reinsurance pool.

But Mr Sukkar says “the reality is … we could reduce premiums today” if the ALP government agreed to axe insurance taxes.

“The Labor Party with a stroke of a pen could reduce every person’s premium by 10%,” he said.

“I’ve made very clear over the past two days that we will do our bit by hook or by crook, but we expect the Labor Party not to be gouging north Queenslanders by imposing stamp duty on premiums.”

Mr Sukkar says that as premiums rise, so does the stamp duty collected.

“The Labor Party seems to be quite addicted to this pool of money, perhaps secretly enjoying seeing premiums increase because the stamp duty increases along with it,” he said.

“So we’ll expect them to come to the table. It’s not a big request – abolish stamp duty on insurance premiums.”

When asked whether he has the same message for the Coalition-led NSW Government, where insurance taxes make up more than 50% of the premium, Mr Sukkar was less enthusiastic.

He says NSW does not have “acute issues around insurance coverage and insurance premiums” as Queensland does.

“This is a problem for north Queensland. Don’t allow the state government to deflect you in any other way. This is a problem in their state.

“Sadly, as a Federal Government, we cannot make them do it. All we can do is ask that they do the right thing by north Queenslanders and don’t build your budget on flood and cyclone affected communities.”

Queensland Treasurer Jackie Trad told insuranceNEWS.com.au this afternoon that the Palaszczuk Government “welcomes at long last some movement from the Federal Government to fix the ongoing problems with the insurance market in North Queensland”.

“Insurance regulation is fundamentally a federal issue,” she said.

“A North Queensland cyclone re-insurance pool could help reduce premiums if designed correctly. There has been scant detail provided and I call on the Federal Government to include all stakeholders in the consultation on the design this program.”

Ms Trad says the Australian Prudential Regulation Authority noted two months ago that the best way to tackle rising insurance premiums in northern Australia is through risk reduction and “that is exactly what the Palaszczuk Government is doing”.

Ms Trad says she convened a round table after the Townsville floods and afterwards wrote to Federal Treasurer Josh Frydenberg “seeking urgent action to address insurance-related issues faced by residents and businesses in Townsville”.

“More than nine months later, Mr Frydenberg is yet to reply,” she said.

Despite insuranceNEWS.com.au asking whether the Queensland Government is considering abolishing insurance stamp duties, Ms Trad’s lengthy statement did not mention taxes once.

The insurance industry has campaigned for years for the removal of insurance taxes in all states and territories, excluding the ACT, which abolished them in 2016.

A long list of reviews and inquiries has concluded that taxes on insurance are inefficient and contribute to underinsurance.