Regional Victorian brokers are calling on the State Government to justify its decision to raise the fire services levy (FSL) on insurance by 30% amid growing fears it will go back on its pre-election pledge to abolish the tax.

Under the original timeline the FSL should have been phased out by July next year, but the Government has deferred the transition to 2013.

The spokesman for Emergency Services Minister Peter Ryan, who represents a rural constituency, has not responded to insuranceNEWS.com.au requests to discuss the issue.

“The lack of advice from the Government has been quite disappointing,” Insight Insurance Brokers Association Executive Officer Bill Friend – whose membership includes many Victorian regional brokers – told insuranceNEWS.com.au. “It’s been a well-kept secret.”

He says many of his members have already made undertakings to clients that the FSL would be pulled back and replaced with a land tax-based system in July next year.

“The question is, why the delay? This has not been communicated at all.

“It’s now up to the industry to keep on the political leaders’ backs to make sure they don’t forget their promise and ensure this doesn’t get swept under the carpet.”

Shepparton broker Ben Goodall, who is GM of Griffiths Goodall Insurance Brokers, says the Victorian Government “needs to step up to the plate and explain why after supporting the introduction of a property levy, it’s lumping these increases on brokers’ customers”.

The Insurance Council of Australia says the increases are a direct result of the industry’s contribution to the Country Fire Authority jumping 34.6% due to increases in the fire services budget from $309 million in the 2010/11 financial year to $416 million this year.

Mr Goodall says the State Government “fails to see that these rises won’t just be an extra $10 here or there. In some cases Goulburn Valley farmers will be shelling out an extra $100,000 for insurance.

“I am sure when Treasury in Melbourne made this decision they didn’t think of the effect it would have on businesses.”

Insurance tax abolition campaigner and LMI Group MD Allan Manning says it’s now vital for everyone in the industry to stand up and be heard on this issue.

“We all have to tell them how wrong this is,” he told insuranceNEWS.com.au. “If we are silent the Government is likely to let this go through.”

Mr Friend says Insight is working with industry experts and the National Insurance Brokers Association to make sure the FSL doesn’t become a forgotten issue.

“Peter Ryan was quite strong in the early days about this issue, and we will now be using our connections to make sure he doesn’t forget his promises.”