Dr Allan Manning submitted his response today to the Victorian Government’s request for feedback to the Department of Treasury and Finance’s Options Paper on the Victorian Fire Services Property Levy.
Allan who has been a long time campaigner againt the tax, applauded the government in moving the tax away from insurance as Queensland, South Australia and Western Australia have already done. He also agreed and recorded his support on a number of the recommendations put forward.
He did urge government not to overcomplicate the new process and recommend that the transition be done it be done on a monthly pro rata basis rather than daily to minimise the transition costs to all concerned.
Dr Manning pointed out that what appears completely unjust at the present time is the significant amount of capital expenditure that has been included in the CFA budget in the 2011-2012 and 2012 -2013 budgets.
In fact from the time the decision was made to remove Fire Service Levy from insurance to when it will be finally removed just under $250 million of Capital Expenditure will be have been included in the CFA budget. (State Capital Program – Country Fire Authority, Page 53.)
While the benefits of this expenditure will be to all those living and working in the CFA region for up to the next 20 years, on the current funding model a massive 77.5% is to be borne by only by those that insure over the next year or two.
While this may allow the government to introduce the new tax at a lower level it puts an enormous burden on the home owners and business owners/operators that insure at a time when insurance premiums have to increase, typically by 25%, due to the $4 billion in catastrophe losses paid out the insurance industry during this calendar year.
The significant increase in premiums and fire service levy are made worse by the triple tax effect caused by GST and State Government Stamp Duty.
With two full fire seasons to go through before the tax on insurance is removed I fear this will cause both home owners and business owners, particularly in the CFA regions.
This whole issue is something that the current government, particularly Mr Peter Ryan and the Nationals campaigned heavily on to win government on and the people of Victoria appear to be have been let down and dare I say betrayed by the inclusion of such a huge amount of capital expenditure being included in the run off period of the existing inequitable Fire Service Levy.
Dr Manning recommended that during the transition that all capital expenditure be removed from the amount used to calculate the Fire Service Levy and only an amortised proportion based on the value to the state during the period be brought to account and taxed.
The 17th Century philosopher, John Lock (1681) argued that "Government has no other end but the preservation of property". Allan took this one step further and suggested that the primary role of government is to encourage and protect homes and businesses, and safeguard the on-going growth of the economy. The current system of funding fire services in Victoria has been working contrary to this primary role and this transition model is even worse as it will force people to not insure all classes or under insure.
As we saw following the ‘Black Saturday” bushfires this leads to people being caught in a cycle of poverty and dependence on welfare which places a greater burden on all within the community.
On the question of the appointment of a Essential Services Commission, Dr Manning gave it his full support however he went on to recommend that the power of the Essential Services Commission be extended to include the monitoring of expenses charged to the budgets of both the MFB and CFA; the fees paid to council etc to ensure that all parties involved act honestly and in the best interests of the people of Victoria.
For a full copy of Dr Manning’s submission please click here.