Most in the community appreciate the issues facing government with the falling GST revenues effecting government coffers. What we at NoTaxOnInsruance.com.au cannot understand is that with the affordability of insurance being such a hot topic in Queensland and so many politicians complaining about this very real issue, that the Queensland Government add to the communities woe by increasing Stamp Duty on General Insurance to 9% of the base premium plus the GST component. The new published rates and the old are set out below:
General insurance (on or after 1 August 2013):
- Class 1 general insurance—9% of the premium paid (including GST)
- Class 2 general insurance—9% of the premium paid (including GST).
Class 1 general insurance is general insurance other than CTP or Class 2 general insurance.
Class 2 general insurance is general insurance for, or relating to, professional indemnity, a motor vehicle (other than CTP insurance), a first home mortgage, a life insurance rider or personal injury relating to aircraft travel.
General insurance (before 1 August 2013):
- Class 1 general insurance—7.5% of the premium paid (including GST)
- Class 2 general insurance—5% of the premium paid (including GST).
There is so much wrong with this. First it is a tax on a tax which to my mind should be outlawed by the Federal Government. Prof Allan Fels made such a big deal about individuals and companies profiting from GST and yet the ones that have wroughted the system the most have been the state governments. Talk about double standards!
Next, the Queensland Government should know full well the problems surrounding the affordability of insurance in their state. The huge amount paid out in claims following the year on year floods in Queensland. The lack of flood mitigition works for years, cyclone such as Larry and Yasi all has impact on the cost of insurance.
The reason that we say that the government should know is that the government held a enquiry into the issue. 7 politicians were appointed to hear submissions. As I understand it 26 insurers plus NIBA made submissions and yet less than half those politicians appointed turned up!
A recent survey conducted by Morgan research showed that 15% less businesses had property insurance in 2013 than had it in 2011 before the Brisbane floods. An increasing number of business owners have not increased their sums insured to keep pace with raising building costs while others have shed covers such as business interruption.
Our view is that there has been a drop in both home building and home contents cover as well.
This drop in policy count is worrying in the extreme to me. Every time a family does not have their house, or their contents, every time a business owner does not have the full appropriate insurance in place puts that family or business in jeopardy. This in turn puts pressure on government for more welfare payments and damages the economy.
In all the states of Australia for this increase to be pushed through, for the Queensland Government it was the worst. I know that the human mind can justify anything and the Government and Treasury will argue that their rate is still lower than Victoria but we would counter with three comments.
- Two wrongs do not make a right!
- “Government has no other end but the preservation of property” John Locke (1681)
- "The government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." Ronald Reagan (1984)
Trouble for the people of Queensland, the Trowbridge report recommended subsidising flood insurance but the Federal Government said they could not afford it.
Heaven help the people of Queensland. You have the double burden of unpredictable weather and a state government that simply does not get it!