There’s an obvious and important story to be done about fires, human nature, insurance and state government malfeasance, but it seems no one’s quite up to it yet. The pain of the Victorian bushfires remains too fresh, the wounds too raw.

The Royal Commission might get to it eventually, but just now the inquiry is, understandably, more about the tragedy of human death than property, gross government failure, moral hazard and the appropriate use of donated funds.

When the public is up to it though, there’s a responsible job to be done: A couple of reporters should be sent in search of fire victims, the insured and the uninsured, and record their experience with government and community assistance.

I’m not talking about the bushfire victims – those endlessly interviewed, prodded and poked to relive tragedy, hopefully to cry for the camera – but other random fire victims, any of those whose houses singularly burn each year in town or country.

The results of that research could then be compared and contrasted with the money devoted to the bushfire victims whose houses burned with many others. And then the first of a series of questions could be asked: Is such a big difference rational?

(Yes, that is pre-empting the research, but it’s a fair bet that unless a lot of other houses burn at the same time, you wouldn’t receive a publicly administered grant of thousands of dollars if your weekender shack burns down or a non-means-tested grant of $50,000 plus potentially considerably more on a means-tested basis if your primary house is lost. Tenants don’t normally receive grants of $15,000 for loss of contents if their rented properties burn, or grants to cover the cost of moving house. Damage to partially-built houses normally doesn’t attract special compensation. And so on.)

It is entirely understandable and warming that Australians wanted to help after such an appalling loss of life and personal injury. Money can’t replace life or lessen the loss, but it’s all well-meaning people could do, a way of saying they care, that they feel sorry.

The media played a role in whipping along the sympathy, enthusiastically encouraging people to donate money without any consideration of what that money could or should do. It would seem impossibly churlish to raise such a question.

Occasionally a particularly tragic singular fire also receives the full blast of media attention, especially if children are killed, and kind-hearted strangers donate money and goods. But most singular fires pass with a few soon-forgotten paragraphs in the local paper.

That’s why most people have insurance.

Role of insurance

Yet all the time Australia’s governments discourage householders from taking out insurance coverage. Worse than that, the two most populous states allow the uninsured to bludge off the insured through an absurd method of funding fire brigades. And the general media takes little notice of such patently egregious behaviour.

Insurance Council of Australia research shows 20 per cent of Victorian households don’t have any home or contents insurance. The national figure is 23 per cent. The curious thing about those two figures is that the Victorian Government does most to discourage adequate insurance coverage.

On top of every $100 in household insurance premiums, rural Victorians pay an extra $52.46 in GST, state stamp duty and fire services levy. Insurance is economically penalised as if it was a social evil, like cigarette smoking.

City-dwelling Victorians pay $146.41 for a $100 insurance premium and NSW is not far behind – $146.28.

Only NSW and Victoria persist with a system of levying insurance policies to pay for fire brigades. In the case of rural Victoria, it’s a whopping 26 per cent, on top of which sits the 10 per cent GST and a 10 per cent state stamp duty.

Melburnians pay a 21 per cent fire levy and NSW residents 22 per cent. When it comes to whacko taxes, the stuff of incompetent governments, such fire levies would be up with the worst.

The other states make do with a stamp duty gouge, ranging from a low of 7.5 per cent in Queensland to 11 per cent in South Australia. And the Federal Government is into all the insured for GST.

The Victorian Royal Commission will get around to the question of insurance and fire levies. It has asked the Insurance Council for a submission framed within its own specific terms of reference. Unfortunately the council, acting on legal advice, won’t release the submission until the commission does.

The submission is likely to use council-commissioned research by Access Economics that demonstrates the gross inefficiency of the NSW and Victorian taxes on insurance. One might also expect a co-relation between under-insurance and policies that carry a 52.5 per cent tax penalty.

In the name of equity – and no doubt for the better pricing of members’ products – the Insurance Council has suggested the fire levy be moved from insurance policies to local government rates so that all land owners share the burden.

Whether the commission will buy into the moral hazard of providing money for people who chose not to insure – and provide them with more than those who were insured and paid higher taxes because of it – is moot.

As is often the case in the aftermath of disasters, there will no doubt be talk about whether insurance should be compulsory. That could have interesting financial ramifications for insurance companies, but it’s hard to imagine any government pursuing it.

Without compulsion though, the financial penalties for the individual not being insured, for not taking responsibility for his or her own possessions, need to be clear – unless a lot of other houses and lives are lost at the same time.