NIBA continues fight for ending stamp duty on policies

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6 February 2012

The National Insurance Brokers Association (NIBA) has again called on federal and state governments to abolish taxes on policies.

In a submission to the Federal Budget, NIBA says virtually all Australian policyholders pay at least double taxation – GST and state taxes – on their cover.

“On behalf of the millions of Australians and businesses who purchase insurance each year, NIBA strongly urges the Federal Government to lead the process for reform of insurance taxes,” NIBA CEO Dallas Booth said.

“Insurance taxes directly affect the affordability of insurance in Australia and they contribute directly to the underinsurance and non-insurance concerns across the community.”

While welcoming the impending removal of the fire services levy in Victoria, NIBA notes it is still in force in NSW.

In that state policyholders pay triple taxes on their premiums, amounting to about 60% of their insurance costs, NIBA says.

“The NSW Government has shown no sign of any desire to remove the FSL, and the combined taxes will continue to create a heavy burden for those who wish to protect their assets through comprehensive insurance coverage,” Mr Booth said.

But the association admits any removal of taxes in insurance contracts will hurt the state’s revenue streams and alternatives must be found.

“Technical work by the Insurance Council of Australia and others has identified possible alternative sources of revenue for the states and territories,” he said.  

NIBA has suggested more economically efficient land and payroll taxes could be an alternative source of revenue for the states.