SYKES: SCRAP FIRE SERVICES LEVY

The Fire Services Levy on insurance policies should be scrapped and replaced by a property based levy according to The Nationals Member for Benalla, Bill Sykes.

Dr Sykes raised the concerns of country Victorians when he spoke against the Bracks’ Government plans to modify the Fire Services Levy in Parliament last week.

Dr Sykes said, “The Fire Services Levy is a dog, a mongrel dog; it should be put down and replaced by a more equitable levy based on property value.

“Currently country Victorians pay the highest taxes in the world on their insurance policies -substantially more than Melbourne people.

“The reason for this is that only those that take out insurance coverage contribute to the cost of running the Country Fire Authority (CFA) and Metropolitan Fire Brigade (MFB).

“Up to 25% of home owners have no insurance and many more homes and businesses are grossly under insured. Many organisations also avoid paying significant fire services levies by insuring via discretionary mutual funds.

“Currently those that stand to lose the most in the event of a fire (ie. those that are not insured) are the ones who are not contributing to the expense of fire services.

“Furthermore, motor vehicle owners pay no fire services levy despite the fact that motor vehicle accidents account for 15% of fire service call outs.

“Clearly many property and vehicle owners are not paying their share!

“The ridiculous nature of this ill-conceived plan goes further… the Fire Services Levy is based on a percentage of the insurance premium but the Government has limited this formula to policies with a $10,000 excess or less.

“Those policies that exceed a $10,000 excess will be charged a levy based on premiums with a lower excess. Therefore the levy will increase substantially for these policy holders.

“Many companies who opt for higher excess do so with strict risk reduction policies to avoid fires, theft, accidents (etc). Now these companies will be punished!

“After considering these changes it came as no surprise to me to find out that the Insurance Council of Australia have not even been consulted. The Government is introducing a levy that will substantially reduce the incentive for companies to take out ‘high excess policies’ without even consulting the industry body.

“Not only will this approach continue the inequitable funding of fire services in Victoria, it will be a further disincentive to businesses setting up in Victoria as their Fire Services Levy costs will increase by $100,000’s.

Dr Sykes concluded, “The solution to funding fire services is simple – scrap the fire services levy and replace it with a levy based on property value. This approach is working well in Western Australia with people who have traditionally fully insured their property now paying less for fire services.

Media contact: Bill Sykes (03) 5762 2100 or 0427 624 989