On the 8th July NoTaxOnInsurance posted an article advising that the New South Wales Government had recently released a Funding our Emergency Services Discussion Paper as part of a three month consultation period to identify a better way to fund emergency services in NSW. Included in the article was a link to this Discussion Paper (www.haveyoursay.nsw.gov.au/ESL.)
What pleases me greatly me on the one hand and staggers me on the other is that this document at the very start of the consultation process states:
An abrupt replacement of an insurance based system with a system based on land values could cause some households and businesses to delay renewals on their insurance until the insurance levy is abolished.
Depending on timing, individuals could pay an additional component in their insurance premiums, and pay a property based levy for the coming year just a short time later.
To avoid incentives to delay the purchase of insurance, insurance companies could be required to reduce their surcharge on insurance premiums by 1/365th per day. A compulsory scheme would require a defined methodology under which insurance companies would pass on the reduction." [refer page 25.]
Whether doing the transition on a day by day basis or on a monthly basis in line with an insurer's monthly renewal run is something I am sure the insurers will discuss with government.
The staggering part is that while the NSW Government discussion paper picked this important issue up from the start, it was completely overlooked by the Victorian Government which continues to insist that the insurance industry meet the full $580 million tax liability for Fire Service Levy, plus the 10% GST and the 10% State Government Stamp Duty for the full financial year meaning that Insureds are expected to pay the tax twice: once with their insurance, and from July 2013, once with their property rates for the period from 1 July 2013 to the next renewal of their insurance.
As the NSW Government predicts, this will lead to people not increasing their insurance as they should, or worse still, not insuring until 1 July in to avoid completely the double tax.
Does this mean that the politicians and public servants are smarter in New South Wales or is it that Victorians are less caring or greedier?
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