The Tasmanian Government has reneged on its commitment to reduce insurance duty on compulsory third party (CTP) premiums for 2017/18.

It says the loss of over half a billion dollars in GST revenue prior to the 2016/17 budget, announced last week, is the reason for the about face.

Two years ago the government said it would reduce duty on CTP motor premiums back to pre-October 2012 levels.

It planned to do this over two years starting July 1 next year.

The 2016/17 budget papers say the government will “defer the implementation of this change in insurance duty rate until the budget is in a stronger position”.

Insurance Council of Australia (ICA) spokesman Campbell Fuller says all insurance taxes are unfair.

“Though the [ICA’s] member companies are not involved in Tasmania’s government-underwritten CTP scheme, as a matter of principle ICA considers that state taxes and levies on insurance products are unfair, inequitable and an inefficient means of raising government revenue,” Mr Fuller told insuranceNEWS.com.au.

The budget papers also reveal the government provided an additional $31 million to the Tasmanian Fire Service in response to January’s bushfires.

The government also announced it would allocate $250,000 for a research initiative investigating the impact of climate change on future bushfire risk in Tasmania’s wilderness world heritage areas and determining appropriate fire-fighting responses.