The South Australian Council of Social Service (SACOSS) is calling on the state government to give consumers relief from tax on premiums to help households take up insurance.

In its latest Cost of Living report, SACOSS is asking the SA government to either grant a short-term moratorium or offer a rebate to low-income households to help make insurance more affordable.

“In the light of the devastation of fires in the Adelaide, the South Australian government should review the stamp duty on insurance premiums,” SACOSS says.

“After a disastrous summer … insurance coverage and costs should be at the forefront of cost of living considerations, not least because climate science predicts that the extreme weather events are likely to grow more frequent and more challenging.”

In SA, an 11% tax on general insurance contributes $369 million to the state budget.

SACOSS says the affordability of insurance is not simply an individual issue of choice but a “systemic issue” which will impact on the whole community. To better protect vulnerable and disadvantaged households it is important affordability is not a barrier, it says.

“Those without insurance will be more vulnerable to catastrophe and bear more direct costs but in turn this will require more charitable or governmental support – at a cost to all tax-paying households,” it says.

Insurance Council of Australia modelling suggests the removal of stamp duty in South Australia would lead to a 22% reduction in the number of eligible households without house insurance.

SACOSS is also calling for more insurance companies to develop low-cost options and for governments to better promote existing products.

It commended two policies designed to enable people on low incomes replace essential items like computers and whitegoods: Essentials by AAI, which allows use of Centrepay to manage payments, and Insurance 4 That, developed by IAG, which provides single-item options as an alternative to traditional contents insurance.