It is with great disappointment, but no real surprise, that I heard the Brumby Government has not accepted the call from the Bushfire Royal Commission to remove the unfair tax on general insurance and replace it with a broad-based property tax.

Mr Brumby himself has repeatedly said he sees no reason to change the current tax regime. To anyone who understands anything about basic economics, you know that if you increase the cost of a product or service, people buy less. This is the reasoning that governments use to increase taxes on tobacco, cigarettes and alcopops. They are justified in doing so as (i) it harms the people they are elected to protect, and (ii) it places a huge burden on the government’s health system. However, by placing such a huge tax on insurance (in fact, triple tax given there is a fire service levy, GST and State Government stamp duties), the government is harming the people they are elected to protect. Under-insurance causes enormous financial loss to those that sustain major property losses, and also encourages people to stay and fight fires to protect their uninsured property. It also places an enormous burden on the community with business failures, loss of jobs and, in the worst situations, loss of life.

Every single person in the State of Victoria benefits from the great work of our fire fighters and other emergency service personnel. As such, we should all shoulder the burden for this; not just the prudent and risk-averse. 

You see the complete hypocrisy of the current tax system when Premier Brumby said that in the event of a major bushfire the emphasis was on the protection of life, not property. So why is general insurance being taxed and not life insurance?

Begs the question, why Mr Brumby doesn’t follow the example of the more enlightened States of Queensland, South Australia and Western Australia. These States removed the tax years ago and included a modest levy with Council rates; the reason is that it is a hidden tax. Under the guise of a fire services levy and with the triple tax effect, it is ‘out of sight, out of mind’.

Mr Brumby, please listen to the wise counsel of the Commissioners and show some real statemanship. Get rid of the tax on insurance, and encourage the community to buy full insurance to protect themselves from financial losses should the unthinkable happen to them and they suffer an insurable loss, particularly with only a few months to go before we’re looking down the barrell of another bushfire season. Victorians deserve nothing less!