Tasmania’s fire services funding levy is dealing businesses a double blow, the National Insurance Brokers Association (NIBA) says in a submission to a review of the arrangements.

NIBA says commercial premiums have risen dramatically over the past few years and as a result the levy amount collected has also become more significant.

“This increased financial pressure from both increased premiums and an increase in the fire service levy collected on the premium is a double blow to businesses, many of whom are facing an uncertain economic future,” the submission says.

NIBA supports an option to move to a combination of a single-rate property levy while also continuing a motor vehicle levy, given the fire services’ role in responding to road accidents.

A proposed additional charge for bushfire-prone areas is also supported to underpin resourcing to protect homes.

Tasmania’s fire service funding model is among the most complex, with levies raised from a property tax collected by local government, a fixed fee applied to motor vehicle registrations and a levy on commercial, marine and cargo and aviation insurance policies.

The Government released a discussion paper in August on a new Fire Service Act, while a Treasury Options paper outlined three alternatives to current funding arrangements. Submissions closed last Monday.

Last financial year the insurance levy collected $29.2 million. A further $9.2 million came from the motor vehicle levy and $48.1 million was paid via the fire service contribution.

NIBA says businesses that own their premises pay both a fire service contribution on their council rates and a levy on their premiums for the same property under the current model.

“The burden placed on businesses to fund the states fire services is not proportionate to the risk they pose,” it says.

Insurers and brokers have highlighted that state levies on premiums are contributing to underinsurance.