NIBA HELD out few hopes for any form of relief on insurance taxes as the Federal Treasurer Wayne Swan delivered the Federal Budget last night May 11.
Noel Pettersen, NIBA CEO, said today: “There was nothing in the budget relating to general insurance.
“It did report Victoria will get $11.2 billion in GST revenue from Canberra. Notwithstanding that 30% of that will go to health as agreed recently, maybe some could also go to abolishing insurance taxes including fire service levy on insured’s… or is that a pie in the sky?
“The simple fact remains that the government only accepted around 10 of the 130 Henry (Tax Review) recommendations – for whatever reason.
“Certainly it could not be called ‘tax reform’. It has been suggested that Henry (Ken, Secretary of the Treasury) did want to get rid of state taxes on property, payrolls and insurance but (Prime Minister) Rudd did not want another stoush with the states, so soon after the health and hospital problems.
“Of course, the states will also have to play ball and the Brumby Government in Victoria has made it quite clear that an insurance levy, which brings in $510 million a year from policyholders, is the fairest way to collect fire services levy funds.”
The good news was that the Henry Review did at least put on record that all state taxes on insurance were inefficient and should be abolished, Mr Pettersen said.
“NIBA is in there for the long haul on this issue. It’s now getting more traction in the media and NIBA has been relentless in showing how world record taxes impact ordinary Australians – we will just keep on doing this and encouraging our members and their clients to make some more noise as well.”
The pressure was mounting for change.
“We’re also very hopeful the Victorian Bushfires Royal Commission will accept the advice from Counsel assisting the Commission and replace the current insurance based model with a property based levy (in its final report later this year).”
In a message to members about the Federal Budget, Mr Pettersen added: “You should seek your own advice as to how the Budget impacts you or your business.”
Rob Whelan, CEO of the Insurance Council of Australia, was tied up in a series of meetings in Canberra today and was not immediately available for comment.