NSW has abolished a range of insurance duties for small businesses from next January, in changes announced in last week’s state budget.

About 677,000 businesses with a turnover below $2 million will be exempt from duties on premiums for commercial vehicle, professional indemnity and product and liability cover.

“These tax cuts will encourage small businesses to take up more appropriate levels of insurance by removing the disincentive caused by higher insurance premiums,” the budget papers say.

The measures are forecast to reduce government revenue by $318 million over the four years to 2020-21.

The state has also abolished duties on crop and livestock insurance, at a cost of $12 million over four years, and confirmed the duty on lenders’ mortgage insurance will be abolished from July 1, reducing revenue by $122 million.

Insurance Council of Australia CEO Rob Whelan says businesses will get “welcome financial relief” from the changes.

“For some small businesses, insurance stamp duties add thousands of dollars to their expenses each year,” he said.

“Though small businesses will still pay stamp duties on other insurance products, the Government is moving in the right direction.”

General and life insurance duties are estimated to bring in $927 million for the Government next financial year, down from $956 million this year.