The ACT will cut stamp duty on insurance premiums a further 20% from July 1, after announcing last year it would wind down the tax.

General insurance duty falls from 8% to 6% and life insurance duty falls from 4% to 3% in the territory’s budget.

The tax rate was originally 10% for general insurance and 5% for life insurance but is being scaled down by 20% a year for five years.

Insurance tax will be abolished by July 1 2016, Treasurer Andrew Barr says.

A household with $2500 in premiums will save $100 next financial year and a business with $20,000 in premiums will save $800.

General insurance duties are forecast to total $44.9 million this financial year, an increase on the $37.2 million estimated at the start of the period.

The figure is expected to fall to $35.4 million next year and zero by 2016/17.

Life insurance duties are expected to raise $2.1 million this financial year and $1.7 million in the next.

The Government’s total insurance tax take is estimated at $64.5 million this year, the budget papers say.

The budget includes a regulatory levy to be collected from workers’ compensation insurers, to offset the cost of administering workers’ compensation laws next financial year.

If legislation passes the charge will be expanded from 2014/15 to include the cost of administering work health and safety laws, the Government says.

The levy is forecast to raise $1.9 million next financial year, rising to $3.2 million the following year.

It will allow 12 additional WorkSafe ACT personnel to step up regulation of the construction industry and increase expertise in investigating complex breaches of legislation.

The Federal Government is expected to provide $133 million in grants to implement the National Insurance Affordability Initiative next financial year, rising to $416 million in 2014/15.