After all the bad news of significant increases in insurance taxes (Fire Service Levy) in Victoria and a 25% increase in Stamp Duty on insurance policies in Tasmania, it is refreshing to see that one government gets the link between increases in the price of insurance and reduced coverage.
An independent study conducted by the Centre for Law and Economics at the Australian National University estimated the number of households with building insurance would increase by 13% if stamp duties were removed in the ACT and NT. This is in line with the fundamental basic principle of economics. It is why governments increase the price of cigarettes, alcohol and fuel to get the public to buy less.
I would like to see the Centre from Australian National University crunch the numbers on the effect of FSL, GST and Stamp Duty on levels of under-insurance and non-insurance in Victoria. Perhaps I do not as it would only make me feel sicker than I do on this subject.
But what government in their right mind would want people to buy less insurance? At least the ACT Government get it, and good on them.
While I and many in the insurance community welcome the WA Government's decision to hold Stamp Duty, the reality is that it is near equal to the highest in Australia. Tied with, yes you guessed it, Victoria. In fairness, South Australia at 11% is the highest, WA, Victoria, Tasmania, ACT and NT are all currently at 10% Stamp Duty on insurance.
I say it again. Well done, ACT Government. You are showing real leadership something that this country and economy really need at this time when it is so tough for so many. No FSL on insurance and, by the end of 2016, no Stamp Duty. Well done!