All this is a far cry from Hong Kong and Japan, where property insurance premium taxes don’t exist. The UK has them; but a 5% rate there is far removed from Victoria’s 81.5% – and due to explode. Likewise, Ireland’s 2%; Germany’s 10%; Singapore’s 2% ; the 2.4% paid in the US, or the 3.5% levied in Canada, puts the spotlight on Victoria’s madness.

Western Australia has one of the best models in Australia for funding fire services. Unlike Victoria’s archaic and unfair system, property insurance premiums have been taken from the equation. Thus the WA government (like the governments in Queensland, the NT, South Australia and the ACT) has ensured that no householder or business pays the GST and State stamp duty on fire services’ levies. Obviously, one does not come to Victoria if fairness or economically viable premium taxes are requirements.

If WA’s model were adopted, “premiums” for businesses would drop by one-third. If all three of the current taxes were removed, rather than being augmented by a fourth major tax, the “premiums” now payable would almost halve. The same principles would apply to household and business premiums across the State.

Surely the Victorian government cannot be so ignorant or incompetent that it earnestly believes its insurance premium tax system is fair and could withstand the scrutiny of a completely independent enquiry. Was it dishonest when it commissioned and stage-managed its most recent enquiry?

Might it not appear strange to outsiders to learn that stage 4 premium taxes won’t be levied on premiums at all, but non-existent, or phantom, premiums (ie. deductibles)? Deductibles do not transfer risk to an insurance company. They therefore don’t attract premiums. Also, a tax on deductibles will further distort the insurance process because, for the first time, tax will become a major factor in the formulation of deductibles. This will put Victoria out of step with the rest of the world.

So for how much longer will the government be able to conceal its “madness” ? How much longer will it be before Victorians (and those from NSW and Tasmania, where the property insurance tax systems are similar) are extricated from this mire?

Meanwhile, the Liberal party has stirred itself. In April 2006, at the State Council of the Victorian Division, the following resolution was carried;

That this State Government calls on a future Liberal State Government to abolish in its first year the State’s discredited and unfair fire services’ levy.