The Insurance Council of Australia (ICA) says it’s time the Federal Government stood up and took some notice on tax reform, a long-running issue for the industry and buyers of insurance.

Still smarting from the refusal of NSW and Victoria to drop their onerous and inequitable fire services levies and stamp duties, ICA has found an ally in the Business Coalition for Tax Reform. ICA shares membership of the coalition with such prestigious organisations as the Australian Stock Exchange, the Australian Retailers Association, CPA Australia and the Real Estate Institute of Australia.

The coalition has released a report commissioned from Access Economics which says state taxes, including the fire services levy and stamp duty, ought to be part of discussions which will occur next year under the intergovernmental agreement.

Access Economics identified the levy and stamp duty as among the top four inefficient state taxes.

Stamp duty of 5-10% is applied by the states and territories to all insurance policies, and there is a fire services levy of 24-40% on property insurance in Victoria, NSW and Tasmania. The stamp duty is imposed on top of the 10% Federal Government GST.

ICA Executive Director Alan Mason says there is evidence that businesses would take up more insurance if taxes are reduced. “It’s time to get on with reforms that promote efficiency and help people protect their own property, rather than taxing insurance at a similar level to alcohol and cigarettes.

“The tax burden is increasing, with the NSW Government indicating it will raise an additional $35 million over four years, the bulk of which will be collected from policyholders.”