The industry might be campaigning heavily against insurance taxes, but the Victorian Government isn’t listening. It has just announced a fire services levy (FSL) increase of 4% for rural businesses in the state.

Victorian businesses have always been the highest taxed region in the world when it comes to insurance taxes – but the new FSL figure of 44% blows all other states out of the water. Victorian metro businesses are subject to a 50% FSL, which with other taxes adds about another 80% to their base premiums.

National Insurance Brokers Association CEO Noel Pettersen says the FSL system, which only exists in Victoria, NSW and Tasmania, is inequitable and unfair on people who are prudent enough to insure their assets. He says the levy also acts as a disincentive for people purchasing insurance.

“At the start of a bushfire season which is expected to be among the worst in recent history, this tax system remains a major disincentive for householders and businesses to adequately insure,” he said. “Governments which continue to gouge insurance-buyers must consider the evidence that a rates-based system makes premiums more affordable.”

In other states fire services are funded by a rates-based system, which ensures the costs are equally spread throughout the community.

“The industry doesn’t want to collect this unfair and inefficient levy, and neither do insurance-buyers,” Mr Pettersen said. “It’s time for the fire services levy to be abolished and replaced with a more rational collection system through property rates.”