Progress on reforming inefficient insurance taxes has stalled, according to Shadow Minister for Small Business and Financial Services Katy Gallagher.

Speaking at the Insurance Council of Australia annual forum in Sydney, Senator Gallagher said reform on the taxes “has actually gone backwards”.

She cited five reviews since 2009 that have highlighted the inefficiency of state insurance taxes.

“These reviews are consistent in highlighting how insurance taxes contribute to underinsurance, and discourage people from taking out an appropriate level of cover,” she said.

The former ACT chief minister stressed change is possible despite state budget challenges. Insurance stamp duties were abolished in the ACT from July 1 last year.

“This means the ACT has become the first place in Australia where businesses are not burdened by insurance taxes; the first place in Australia where consumers are not discouraged from taking out the protection that they need,” she said.

“I think the ACT experience does provide a guide to other jurisdictions about how good reforms like these can be delivered even in the face of strong political and stakeholder opposition.

“And it shows that even in the current budgetary and political environments, when governments explain reforms and persist with them, they can be delivered.”

Senator Gallagher also criticised the Federal Government’s slow response to the Northern Australia Insurance Premiums Taskforce report, which was released a year ago.

“Despite the Government promising a detailed response by [June 30] last year, the response has yet to be delivered,” she said.