By Danielle Le Grand

Farmers insured against fire damage are missing out on Victorian Government recovery grants.

The Victorian Farmers Federation (“VFF”) says it is another blow to landholders who are already funding the lion’s share of fire services via taxes on their insurance bills.

Earlier this month, the Victorian Government announced grants of up to $21,900 would be available to Stawell fire victims who had lost their homes and were uninsured or insufficiently insured. These grants, which are income-tested, are intended to help with temporary living expenses and re-establishment costs.

The Government also reimburses insurance excesses up to $400 for burnt Crown land boundary fences and the full cost of fences damaged as a result of machinery used in the control of bushfires that started on public land.

But VFF president Simon Ramsay said the decision to exclude landowners who had taken the responsible step of managing the fire risk on their properties by paying for insurance, was wrong: “[They] have every right to feel aggrieved by the Government’s slap in the face simply because they chose to do the right thing before the fires devastated their land”. He said it was part of a bigger problem for insured landowners, who were paying the bulk of financing the State’s fire services, which benefited the entire community.

The Fire Services Levy, which is charged on top of property insurance premiums, increased from 40% in 2004 to 50% last year. "For every $100 spent on fire insurance cover, a business in rural Victoria pays an additional $50 in Fire Services Levy”, Mr Ramsay said. “GST of $15 is added, and also 10% stamp duty [of] $16.50, which increases the cost of insurance by a massive 81.5%. In effect, those who insure are subsidising the [fire] protection of the uninsured”.

Fed up: Volunteer fire fighter
and farmer Doug McLarty
is sick of being taxed twice
on his fire insurance.


Insurance Council of Australia figures show the CFA’s budget for 2005-2006 is $204 million, 77.5% of which will be collected through the fire services levy.

Mr Ramsay advised it was frustrating that for years the State Government had not responded to calls to make the collection of the levy fairer. ”All taxpayers should be funding fire services, with the money coming out of consolidated revenue”, he said. “I had my invoice the other day – my insurance premium was $1,300, my fire services levy was about $700, my stamp duty was about $400 and my GST on the whole lot was about $350”, Mr Ramsay said. “That means the fire services levy, the stamp duty and the GST were greater than the insurance premium itself. That is absurd – that is a tax on a tax on a tax”.

And insurance companies agreed, Mr Ramsay said.