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ICA renews push for tax reform

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The Insurance Council of Australia (ICA) says tax reform will help consumers as the nation’s economy adjusts to the impact of COVID-19.

In a submission to the draft report from the NSW Review of Federal Financial Relations, ICA argues that a “broad-based land tax” would be the best instrument for replacing “regressive and inefficient” stamp duties on insurance and the NSW Emergency Services Levy (ESL).

ICA says the total tax burden on insurance customers totalled $5.8 billion in 2019/20, with the figure expected to rise to $6.3 billion this financial year.

It says the taxes are “one of the main reasons for non-insurance and underinsurance of homes and businesses”.

“We know tax reform is a big ask at present,” ICA CEO Rob Whelan said. “However, we believe updating the tax system will help reduce pressure on consumers as we work to address the impacts of COVID-19 on our economy.”

As insuranceNEWS.com.au has reported, the NSW review led by former Telstra MD David Thodey found there is “no principled case for applying a special tax on insurance” and that the NSW ESL and other insurance taxes should be replaced as a priority.

Click here to read ICA’s submission.