It’s official: the Federal Government’s review of taxation will look closely at insurance taxes in order to “potentially remove the barriers to better insurance”.

Assistant Treasurer Chris Bowen made the promise at an Insurance Council of Australia (ICA) luncheon in Melbourne last week. He also answered questions on the scope of the federal review led by Treasury Secretary Ken Henry.

He says state-based stamp duty and the fire services levy in NSW, Victoria and Tasmania will be closely reviewed.

“The Government recognises that non-insurance remains a significant issue in Australia,” he said. “I know stamp duty is an important issue and the review will be looking at this closely.”

The review is also expected to bring some consistency to the states’ varied and complex tax systems. “As we fragment our economy by imposing different regulatory tax regimes we make our economy smaller, which is something that makes no sense,” Mr Bowen said. “Working co-operatively with the states to reduce and where possible eliminate these regulatory differences is a key priority.”

Mr Bowen said he was surprised to learn about the extent of non-insurance in Australia. An ICA report published last year found 23% of residential households don’t have building or contents cover.

“That’s 1.8 million uninsured households,” Mr Bowen said. “I must admit I was very surprised by that.”