It is with great disappointment that insurance, the protector of personal assets and wealth creation, has all but been ignored in the media statements of the Prime Minister, Treasurer and Minister for Financial Services; all having made media statements today.
The Henry Review itself called for abolition of stamp duties in Recommendation 55. The review states: “over time, a broad-based cash flow tax – applied on a destination basis – could be used to finance the abolition of other taxes, including payroll tax and inefficient State consumption taxes, such as insurance taxes. Such a tax would also provide a sustainable revenue base to finance future spending needs”.
Notwithstanding this comment, Prime Minister Rudd, Treasurer Swan and Minister for Financial Services Bowen do not refer to it at all. The iniquitous, inequitable fire services levies of Victoria, NSW and Tasmania that I have spoken of time and again are not mentioned.
In its GST recommendation, the Henry Review states: “Recommendation 56: The Government should consider making greater use of GST-free business-to-business transactions or reverse charging, provided the potential compliance cost savings outweigh the additional complexity costs and risks to revenue”. The removal of this would have reduced the triple taxation effect currently in place, but regrettably, that did not go anywhere either.
Also disappointing is the total lack of recommendations for the section titled ‘D4 — Taxing Financial Services’ in the Henry Review.
We are now left with the Victorian Bushfire Royal Commission to address the inequity. It would be easy to lose hope that the inequity of the triple tax on insurance which, in some regions more than doubles the cost of this vital protection, will be remedied, but for the sake of the insuring public and the economy as a whole, this cannot be allowed to happen.