Mond

Friday, 3 November 2006

FIRES SERVICES TAX SLUG TO COUNTRY BUSINESS

The Fire Insurance Levy on commercial property insurance in country Victoria will increase this month by 10%.

The Nationals Emergency Services Spokesman, Bill Sykes, described the increase as yet another example of the Bracks Government hitting the hip pocket of country business owners.

“The Fire Services Levy (FSL) is a tax imposed on insurance to fund fire services including the CFA,” Dr Sykes said.

“The problem with this tax is that it’s fundamentally inequitable. Ultimately, the cost of the levy is paid for by people who take out property insurance, with the greater burden borne by those who live in the country.

“And the latest increase in FSL will only hit businesses and farms in the country, as the levy has not been increased for city-based business. This will place a further burden on country families and businesses who are already struggling because of the continuing affects of the drought.”

Dr Sykes explained how the Government taxes fire insurance three times.

“This tax is a triple whammy. The State Government imposes the FSL then GST is calculated on the insurance premium plus the FSL. The State Government then comes back for another bite of the cherry by imposing a further 10% stamp duty on all these put together.

“This merry-go-round of State and Commonwealth taxes increases commercial insurance premiums in county Victoria by a massive 74 per cent. This makes the taxes on insurance in country Victoria the highest in the world.

“The FSL is an archaic way of funding our fire services as it apportions the burden of the cost on responsible property owners while allowing others to ‘free ride’ and effectively avoid paying for the fire services freely available to them.

“It is also inefficient as it encourages large companies to avoid the levy by insuring overseas.

“The Bracks Government will reap many millions of dollars more from stamp duty due to the increase in the FSL. It has no intention of changing this tax because it is a great source of revenue,” said Dr Sykes.

“At this stage The Nationals are the only political party to recognise the stupidity of the current system of funding fire services.

“The Nationals have proposed replacing the FSL with a more equitable combination of direct government contributions, a charge on property valuations and a small charge on motor vehicle registration,” said Dr Sykes.

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