Victorian Treasurer John Brumby has followed long-standing Victorian Government tradition and pulled the plug on a fire services funding system that is not based on insurance premiums.

Mr Brumby, who had displayed little other than reluctance to consider the issue since the latest in a long string of funding inquiries was called on the eve of last November’s state election, also threw a grenade in the general direction of any industry critics. A government report into the funding alternatives says insurers may have over-collected by $47 million in the four years to 2001/02.

While that was hardly the point – and insurers pointed out that they wouldn’t have called for change if it was that much of a goldmine – criticism of the Government’s reliance on stamp duty for its financial strength remains concentrated on housing rather than insurance.

In a statement, the Treasury and Finance Department said it will “boost the transparency and equity” of the insurance-based system, without explaining exactly what that means. 

“The Government rules out introducing a levy on motor vehicles or a property-based funding system.”

Insurance Council of Australia Group Manager Southern Division Peter Jamvold, who has been leading an intensive fire services levy reform campaign involving a coalition of industry groups including the National Insurance Brokers Association for the past 18 months, says the Victorian Government’s decision is a blow to “those Victorian householders and owners of commercial property prudent enough to insure their properties”.

Ironically, the NSW Carr Government, which has been highly critical of the industry in the past, has adopted a more pragmatic line on fire services funding, having established for itself that the insurance-based system is antiquated and inequitable.