NIBA urges stamp duty relief for north
The National Insurance Brokers Association (NIBA) says stamp duty relief could be offered in northern Queensland to ease the impact of higher insurance costs.
The state increased duties about the same time insurers started raising premiums to cover losses in the region, generating windfall government revenues, NIBA says in a submission to the Australian Competition and Consumer Commission’s (ACCC) Northern Australia Insurance Inquiry.
“The Queensland Government should reform stamp duties on insurance premiums to ensure that owners of domestic and strata properties in northern Queensland pay similar amounts of stamp duty as owners of similar properties in the southeast of the state,” it says.
“That would generate an immediate saving for property owners in the north.”
NIBA says its preference is for the complete abolition of stamp duty on premiums.
The submission also recommends the ACCC hold workshops with brokers in the north to gain a first-hand understanding of market conditions.
It says the key issue facing property owners and brokers alike is the lack of insurance supply in the region, which is due to the extent of losses on a regular basis over the past 15 years, highlighting the need for mitigation and community resilience.
The submission warns about new insurance players entering the market with below “normal” premiums, then quickly exiting after suffering typical claims costs and expenses.
“Consumers are seriously misled in relation to the true cost of risk associated with insurance cover for their property,” NIBA says.
“Short-term disruption resulting from insurers entering and then leaving the market does not help consumers, and does not help the operation of a viable insurance market.”