Victoria says the progressive abolition of business insurance duty, announced in last week’s state Budget, will remove a handbrake on resilience, investment and growth. 

Treasurer Tim Pallas said the abolition would take place over a 10-year period starting from 2024/25, saving businesses “more than $275 million in the first three years alone”. 

Insurance taxes can distort business decision-making and can lead to under or non-insurance, costing the state economy more than $100 million a year, while meaning fewer businesses survive economic setbacks, such as from losses associated with covid and natural disasters, the Budget papers say. 

Currently a 10% duty is paid on commercial and personal insurance policies in Victoria, with the charge levied on top of the goods and services tax and any commission. 

The Insurance Council of Australia (ICA) has been vocal in pushing for federal and state action to remove the taxes and improve the availability and affordability of insurance. 

“The ICA welcomes the Victorian Government’s decision to abolish business insurance duty over 10 years,” a spokesperson told insuranceNEWS.com.au. 

“State taxes and charges on insurance continue to make premiums more expensive, leaving businesses and consumers vulnerable in their time of need. The ICA encourages all governments to abolish unfair taxes and levies on business and home insurance policies to reduce costs for Australians.”