With the bushfire season just starting and homes in New South Wales already lost it frustrates me that the New South Wales, remains the only state in Australia that requires only those that are risk averse and prudent enough to insure to bear the bulk of the cost of funding the fire services.

Every single person who lives in the state benefits from the service any everyone therefore should contribute.

As a result of the triple taxation on insurance, first a fire service levy on home and contents, then GST on the insurance premium and the fire service levy and then a New South Wales Government Stamp Duty on insurance means that people continue to take the risk and not insure or under insure.

The following Table shows that government taxes on home and or contents insurance adds just over 40% to the cost with over 4.5% of the base price being added as tax on tax. One of the first laws of economics is that if you increase the cost of a commodity people buy less.

Tax on home insurance in NSW as at 19 October 2013
Item Running Total Tax Tax on Tax
Premium  $     100.00    
+ Fire Service Levy  $       18.50  $  18.50  
Sub-Total  $     118.50    
+ GST  $       11.85  $  11.85  $     1.85
Sub-Total  $     130.35    
+Stamp Duty  $       11.73  $  11.73  $     2.73
Total  $     142.08  $  42.08  $     4.58


For business insurance, business interruption and contract works it is even worse!

Tax on busines insurance in NSW as at 19 October 2013


Running Total


Tax on Tax


 $     100.00


+ Fire Service Levy

 $       33.50

 $  33.50



 $     133.50



 $       13.35

 $  13.35

 $     3.35


 $     146.85


+Stamp Duty

 $       13.22

 $  13.22

 $     4.22


 $     160.07

 $  60.07

 $     7.57


Those that insure and pay the triple tax are then hit again when the government dishes out money to those that took the risk and lost by not insuring. The fact the government comes along and pays out funds, We are NoTaxOnInsurance appreciate it is completely inadequate but it is still seen as a government bailout, it is yet another disincentive for people to take out their own insurance rather than be a burden on society.

It all becomes a vicious circle. The government will need to spend more on fire services following these fires and will have shelled out heaps in grants. This will mean taxes will go up to fund this and so people will buy less insurance and the problem gets worse and worse. Will it take a massive loss of life as occurred in Victoria in the “Black Saturday” Bushfires and yet another Royal Commission before this government has the sense to do the right thing?

The claims that arise from these fires will also put more pressure on the cost of insurance as this latest natural disaster follows straight on from years of floods, storms and fires that have hit Australia. This increases insurance and reinsurance costs. The quickest way to improve the affordability of insurance is to remove the unfair taxes.

What is so frustrating is that after the White Paper prepared soon after they come into government, I and many others thought that the problem was going to be solved. We sit and wait and see the heartache on television knowing that with a broader tax base the fire services would have more funding and be better prepared for these types of events.

If the New South Wales politicians and public servants had been in the British Parliament leading up to World War II, the outcome of the war would have been markedly different. Rather than getting of their backside and taking on the challenge and protecting their citizens, we would be using those chilling words: “too late”.