Insurance Council applauds FSL call
THE INSURANCE Council of Australia welcomed the Victorian Bushfires Royal Commission recommendation that the current fire services levy (FSL) system in Victoria be replaced with a property-based levy
This was in the Royal Commission’s final report released today.
Rob Whelan, the Insurance Council’s CEO said: “Recommendation 64 of the final report recognises the position that the general insurance industry has put forward for many years – namely that the FSL is an unfair and economically inefficient tax that lacks transparency.”
The ICA fully supported the immediate removal of the FSL in Victoria because it was “inefficient, inequitable and places an unfair burdenon those who do the right thing and purchase insurance”.
“Replacing the FSL with a property-based levywill remove the inequities of the current system.”
The ICA called on the Victorian Government to implement Recommendation 64 without delay.
“The time for review after review of the current FSL system in Victoria is over. This issue requires real action, as recommended by the Victorian Bushfires Royal Commission, and a commitment from the Victorian Government to act in the best interests of the entire community,” said Mr Whelan.
The ICA also says that the funding pressures for Victoria’s fire services are worsening.
It says: “Each year funding pressures increase as the MFB and CFA demand more revenue to provide services to an increasingly larger population.
“In less than 3 years contributions from the insurance industry to the Victorian fire brigades has jumped by more than 50%. The current FSL funding model lacks transparency.
“Fire brigades are not accountable to the Victorian community for their current spending and provision of resources.”
The charge on property model provides the community with greater transparency and spreads the funding burden across the entire community not just those who take out insurance, it adds.
With greater transparency charges will be clearly set and determining on a sliding scale dependent on a clear set of factors such as the locality of a property and its value. In fact some charges can even be capped, particularly in rural areas, where the funding burden will decrease significantly.
To be fair to all citizens, the ICA says that not only is the charge on property model fairer but the ICA believes it will benefit everyone.
Based on the results of this model being used in South Australia and Western Australia, the ICA “can confidently conclude that the entire Victorian community will benefit.
“It is about having a system in place that is fair, efficient and provides effective protection for everyone. It isn’t about a few carrying the funding burden for the entire community.”
FURTHER SUPPORT: Robert Kelly, executive chairman of Steadfast Group Limited. Australia’s massive insurance broker cluster group, added his support to NIBA and the ICA.
He told Insurancenewsaustralia: “Steadfast supports the NIBA position 100%. Noel Pettersen has clearly articulated the issue. Hopefully the terms of reference will be wide enough to get a fair conclusion to what has been a frustrating period of negotiation with the relevant government authorities.”