While some major steps have been made in recognising the need to abolish insurance taxes, more action is needed, Insurance Council of Australia (ICA) GM Economics and Taxation Directorate Alex Sanchez says.

He says last week’s tax forum in Canberra revealed that the reform of insurance taxes is now well and truly on the agenda, which is a huge advancement for the industry.

“Could it have gone further? Arguably yes it could have, but everyone in that room wanted the same thing to be applied to their issues,” Mr Sanchez told insuranceNEWS.com.au. “We got a win, but there is always more work to do.”

He also stands by his reported comments that a plan to harmonise state taxes suggested at the forum represented the “last refuge of scoundrels”, saying discussions on harmonisation looked at the process but not the reality of removing taxes.

Although ICA agrees with the concept in principle, he says more needs to be done than the support of changes to a harmonisation of the paper process.

He says the states are too reliant on “deplorable” revenue sources like insurance taxes and shouldn’t be let off the hook when it comes to reforming the system.

“Let’s spend some time doing proper tax reform,” Mr Sanchez told the forum. “Is this an exercise tax forum or a love-in on harmonisation?

“Tax reform is the abolition of bad taxes and replacing them with better taxes to provide the same revenue stream,” he told insuranceNEWS.com.au.

“I was trying to get across the point that we did not convene in large numbers to talk about harmonising forms.”

Despite his criticism, Mr Sanchez says the forum was a huge win overall for the insurance industry, with governments and business recognising the scale of the problem and the need for such inefficient taxes to be removed.

“From non-government through to the trade union to business, there was no quarrel with our analysis and that was the goal I set out with,” he said.

In the wake of the forum, the National Insurance Brokers Association (NIBA) has also called for more to be done on removing inefficient taxes beyond the mere commitment for harmonisation.

CEO Dallas Booth says although there have been some big breakthroughs in recent years, insurance taxes remain some of the most inefficient.

“There was plenty of support for this proposition at the tax forum, but it is unfortunate that a stand-off between the states and the Federal Government over how these taxes would be replaced has meant the huge disincentive to protect property through insurance remains,” he said.

Mr Booth believes that while the Federal Government ruled out the suggestion of filling the revenue gap through increases to income tax or GST, the states still have room to broaden land or payroll taxes.

“I urge the NSW and Queensland treasurers, Mike Baird and Andrew Fraser, to add this to the agenda of their working group, which will examine tax harmonisation,” he said.