The Insurance Council of Australia (ICA) has called on the Tasmanian Government to scrap its 10% stamp duty on insurance and property and its fire services levies on insurance.

In a submission to the state’s 2014/15 budget consultations, ICA says it should follow the lead of the ACT on stamp duty and Victoria on fire services levies.

“The ICA contends that the… budget process provides the opportunity for the Tasmanian Government to resuscitate its own state tax review process,” the submission says.

“The experience of the ACT and Victoria serve as a reminder that state governments have the capacity to pursue reforms of their tax bases, without recourse to the Commonwealth.”

ICA spokesman Campbell Fuller says NSW is now the only state with an emergency services levy (ESL) on household insurance products, while Tasmania retains a fire services levy on some commercial products. Both add to the cost of insurance.

“ICA continues to discuss ESL reform with the NSW Government and is encouraged by a discussion paper issued last year as part of initial public consultation,” he told insuranceNEWS.com.au. “State levies and taxes on insurance products are unfair, inefficient and inequitable.”

Victoria changed its fire services levy to a property-based charge on July 1, in line with recommendations from the 2009 Victorian Bushfires Royal Commission.

ICA says “significant” events in Tasmania have influenced its budget submission: bushfires in January led to 1800 claims with a total value of almost $90 million; and last financial year the state announced it would increase stamp duty on insurance from 8% of premium to 10%.

“Regrettably, the stamp duty announcement followed on from the decision of the state tax review panel in November 2011 to abandon the state tax review process, which offered stakeholders a path to fundamental tax reform in Tasmania,” the submission says.

Mr Fuller says the Henry tax review and the Productivity Commission have recommended abolishing insurance statutory contributions and stamp duties on cover.