Insurance taxes in rural Victoria reach new high
Commercial insurance buyers in rural Victoria will pay nearly $1 in tax for every $1 of insurance premium following another hike in the fire services levy (FSL).
From December 15 the FSL on commercial policies in rural Victoria will increase five percentage points from 58% to 63%.
It is the only change to levies charged on insurance buyers in NSW, Victoria and Tasmania.
Commercial policyholders in rural Victoria will now pay $197.23 for every $100 of premium purchased, given additional stamp duty and GST charges.
Victorian country broker Peter Rainey told insuranceNEWS.com.au an increased levy will simply exacerbate underinsurance in the region.
“In the current economic climate there are so many costs to weigh up,” he said. “One of the first things that is often considered is insurance. People will often select the bare essentials, so for example they may not extend fire cover to all assets due to the extra cost.”
Mr Rainey, of Actuate Insurance Broking in Bendigo, says the FSL is easy revenue for state coffers because insurance buyers seldom notice the charge because it is buried amid premium pricing.
He says it is time Victoria moved to a property-rates based system in line with other states.
“This is the highest insurance tax in the world and would be a lot lower under a more equitable system,” he said. “We all want a fire service, and we should all pay for it.”
NIBA CEO Noel Pettersen has also attacked the impost in a letter to Victorian Treasurer John Lenders.
“Commercial property insurance in Victoria has now reached the point where for each dollar of basic insurance premium a further dollar has to be paid in taxes and charges,” he said. “Such an arrangement is inequitable and is badly in need of reform.
“No industry can afford such taxes and charges without significant consequences. They simply drive normally prudent people away from insurance protection.”
Mr Lenders has previously defended the fire services levy as the most equitable system of fire service funding.
From December 15 the FSL on commercial policies in rural Victoria will increase five percentage points from 58% to 63%.
It is the only change to levies charged on insurance buyers in NSW, Victoria and Tasmania.
Commercial policyholders in rural Victoria will now pay $197.23 for every $100 of premium purchased, given additional stamp duty and GST charges.
Victorian country broker Peter Rainey told insuranceNEWS.com.au an increased levy will simply exacerbate underinsurance in the region.
“In the current economic climate there are so many costs to weigh up,” he said. “One of the first things that is often considered is insurance. People will often select the bare essentials, so for example they may not extend fire cover to all assets due to the extra cost.”
Mr Rainey, of Actuate Insurance Broking in Bendigo, says the FSL is easy revenue for state coffers because insurance buyers seldom notice the charge because it is buried amid premium pricing.
He says it is time Victoria moved to a property-rates based system in line with other states.
“This is the highest insurance tax in the world and would be a lot lower under a more equitable system,” he said. “We all want a fire service, and we should all pay for it.”
NIBA CEO Noel Pettersen has also attacked the impost in a letter to Victorian Treasurer John Lenders.
“Commercial property insurance in Victoria has now reached the point where for each dollar of basic insurance premium a further dollar has to be paid in taxes and charges,” he said. “Such an arrangement is inequitable and is badly in need of reform.
“No industry can afford such taxes and charges without significant consequences. They simply drive normally prudent people away from insurance protection.”
Mr Lenders has previously defended the fire services levy as the most equitable system of fire service funding.