As I reported on June 12, 2012, the NSW Government is looking at changing the method of funding on Fire Service Levies in that state. They have 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.
The Discussion Paper and public submissions can be found at: www.haveyoursay.nsw.gov.au/ESL .
The deadline for feedback is 8 October 2012. I urge you not to waste this golden opportunity to get your message across. It only takes a few minutes and the feedback takes the form of a questionnaire. Having said this, I could not get the comments section to work on my internet browser but will have this sorted on Monday. If you have the same problem please let me know and I will let the NSW government know and also hopefully advise you on a solution once I have spoken to the LMI IT team.
In the discussion paper the New South Wales Treasurer Mike Baird acknowledged what all of us in the insurance industry have always known. That is, the way NSW currently funds these services is complicated, inefficient and unfair and that recent reviews of the state tax system, including the Henry Tax Review, have recommended NSW move to a property based levy. They are to be congratulated for coming to this realisation and not having to wait for some major bush fire tragedy, as did the Victorian Government, to understand the problem.
The key questions on which your answer is being sought are:
1. Which of the following revenue sources associated with emergency services funding should be replaced by a property levy:
- The emergency services levy payments by insurers and the associated stamp duty;
- Local government contributions; or
- The portion of emergency services funding currently provided from general NSW government revenue?
2. Should a property levy be raised as a fixed amount per property, as a proportion or percentage of property value, or some combination of the two?
3. Should different rates of tax be applied to different property types?
4. Should different tax rates be applied in different parts of the State? If revenue amounts are zoned geographically, where should the boundaries of those zones be?
5. Should some proportion of emergency services funding be raised as an annual charge on vehicle registration?
6. Should pensioners receive concessional rates for a new property levy that funds emergency services?
7. How should the revenue target be set each year to take account of changing costs of fire and emergency services?
8. Should revenue from a land based levy be collected by local governments or the Office of State Revenue?
9. Is a transitional period required for adjustment of the emergency services levy, and if so how should any funding gap arising from a transitional period be recovered?
10. What arrangements are needed to ensure that any reductions in insurance taxes are passed on to consumers?
My own view on all of this is to keep the whole scheme simple. Having said this, equal is not always fair and some loading(s) / discount(s) may be necessary for some industries/occupations and for non profit organisations and those on low incomes.
The important point is to get the tax off insurance so that the terrible incentive not to insure fully is removed.