Will the transition of FSL come back to bite the Victorian Government?

While the eventual removal of the Fire Service Levy is something that the Victorian Government should be proud of, the way they are going about it is the most concerning thing I have seen in the 41 years I have been working in and studying insurance.

The current Victorian Government only have a two-seat majority and two of their members could be in trouble politically. They are the members for Frankston with the latest headlines about taped phone calls so could be the Deputy Premier. This whole issue may of course been diverting his attention away from the important issue of a smooth and fair equitable transition of the tax in line with the previous government’s commitment to remove the tax back on 29 October 2010.

If either or both of these members had to stand down and a by-election was to be called I wonder how the electorate would vote if they truly understood the debacle of the transition of Fire Service Levy from insurance to the much more equitable broad based property tax. From what I gather, the government is banking on the fact that the tax will have been removed from insurance by the next State Election and that memories are short.

Speaking to those who understand the financial ramifications of the way the transition is being handled (see http://www.notaxoninsurance.com.au/documents/TAX%202012%20FLYER.pdf), I am sure that the business and home owners in these two seats (and in most Victorian rural seats in particular) would not support the current government if the opposition were to pick up the issue or some other organisation such as NoTaxOnInsurance, the ICA, NIBA or some other lobby group heavily campaigned on it, simply by simply telling it how it is. That is, the Victorian Government is putting homes and businesses at risk for the sake of collecting more than their fair share of tax from those prudent and risk-averse enough to insure.

I, like many of the readers of my blog, continue to watch the whole issue with great interest.

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