Victorian Premier Steve Bracks is not likely to rethink the way the fire services are funded any time soon if his comments on radio station 3AW last week are anything to go by.

Speaking to interviewer Neil Mitchell on his top-rating radio show, Mr Bracks came in for plenty of heat as he disputed that the fire services levy (FSL) is even a tax. He says the money collected by insurance companies for funding the state’s fire services doesn’t go into consolidated revenue.

“The Australian Bureau of Statistics examines what is a tax and what’s not,” he said. “This is a levy.”

Mr Mitchell described the Premier’s justification as nonsense and said if a levy didn’t exist then people would have to pay a tax.

Mr Bracks also disputed the industry’s claim that Victoria leads the world in taxing insurance premiums.

When asked about a rates-based system for collecting funds for fire brigades, Mr Bracks said the FSL works efficiently and well. “We don’t believe the alternative – that is, taxing households – is fair.”

He suggested insurers are raising premiums and using the FSL as an excuse.

Mr Bracks’ torrid time over an issue which could prove electorally sensitive – Victoria goes to the polls in November – is one result of a campaign mounted since July by National Insurance Brokers Association (NIBA) members educating their clients on premium tax levels. NIBA CEO Noel Pettersen had been interviewed by Mr Mitchell the day before Mr Bracks, and Sydney radio commentators are also beginning to raise the issue’s public profile as well.

The industry has praised the Federal Government’s commitment to persuade state and territory governments to drop insurance taxes, saying the move is a step in the right direction.