Current inquiry into insurance needs to include taxes on insurance
What everyone, including government, needs to fully appreciate is that the economy requires people to insure.
Looking at refunds that should or should not be made to insureds with existing policies in place is one thing, but what is vitally important is that people retain their insurances moving forward.
Every day, I am fielding questions from brokers and insureds of all sizes, looking on how they can reduce their insurance spend. Others, are simply cancelling their insurances without appreciating the huge risk that they are taking on as a result.
Where would Australian home and business owners be if COVID-19 hit last winter, people reduced or cancelled their insurances and then we had the summer we just had with massive bush fires, hail storms, flooding and storms? Even since COVID-19 did hit, we have had a hail storm hit Rockhampton and Yeppoon. North West Victoria had a storm and flood warning issued yesterday. Where would the $4.5 billion paid out by the insurance industry come from, Government? How many businesses would have failed, how many jobs lost and how many people without a home, but still with a massive mortgage?
The scandalous level of taxes on a vital protection measure of our economy has to stop. The state governments have forgone or postponed other taxes that put ridiculous stress on business, such as payroll tax and land tax, but why bash up insurers but keep taxing them so heavily through insurance taxes? We need an immediate stop on insurance taxes, including the terrorism levy, while businesses are affected by COVID-19. This would greatly reduce the cost of insurance, but retain the level of coverage people need more than ever, as they can least afford to self fund a major property or liability loss.
At the same time, the Victorian Government have just given themselves a whopping and obscene pay rise of 11.8% to ministers and the Opposition Leader. How this can be justified any time since in the last decade is beyond me, but now…really?
Our governments have, by working together for a refreshing change, done some great work for this country in keeping the community relatively safe health-wise, but this festering issue is going to really hurt a lot of home and business owners struggling to get through the downturn.
Totally agree Allan. Also; how about our NSW ESL that continues on unabated. Gladys B is very quiet about this other obscene tax.
Hi Allan, I just thought I would add to this email by pointing out that the NSW Govt has already stated that Jobkeeper payments need to be included as “wages” for the purposes of Workers Compensation premium calculations, even when the employees are not working (or incurring any risk). This has been stated on the NSW icare website and I believe the ACT will soon follow suit. With insurers being bought to account for not reducing car insurance premiums I thought this was pretty hypocritical and not reflective of either the risk or the current attitude being portrayed by the Govt. Cheers, Margo.
I am in total agreement with AM on the subject of maintaining insurance two vital sections of business is vital for a community. Financial management (what used to be money lenders now replaced by Banks) and community sharing of loss (now protected by insurance).
Governments of all persuasions have seen insurance as a “safe cow” for milking taxes and Fire Services Levies. A disgrace and only penalises those who insure. Not sharing the load at all. A pox on them all
Bloody good call Margo!
For everybodys’ info, I have just sent the following email this morning to a close friend/contact at icare NSW for their review. Let’s see how they respond :
“Good morning ****,
Trust you are still safe & well.
The following post turned-up this morning on one of the many Industry chat forums to which I participate.
The points raised are most concerning.
Our broking industry, plus the overall insurance industry as a whole, plus of course the general public, really need to know what assistance icare can provide moving forward.
Personally, I just cannot understand how an employer will be required to include Jobkeeper payments as wages in those situations where the employees are NOT working & therefore NOT incurring any risk whatsoever.
To me, I feel that an allowance similar to the current Apprentice scenario, should be immediately & seriously considered.
Further, I really need to know what parameters are going to be applied to upcoming 30/6 renewals.
That is; will icare do the usual, & increase last year’s wages estimate by 10% – 20% etc??
To be blunt, depending on the occupation, a future wages estimate for the next 12 months could well be nil, or at the very least, a substantially lower figure than for the last 12 months.
Then there are the actually industry rates. It would be interesting to know if the claims experience has flattened-out yet, (nowhere near as many people working since the beginning of this year) thus potentially allowing a rate freeze, or even a rate reduction?
Please feel free to redirect my email on to any of your own management that you consider appropriate.
I look forward to your update when you are able.
The relevant post now follows :
“The NSW Govt has already stated that Jobkeeper payments need to be included as “wages” for the purposes of Workers Compensation premium calculations, even when the employees are not working (or incurring any risk). This has been stated on the NSW icare website and I believe the ACT will soon follow suit. With insurers being bought to account for not reducing car insurance premiums I thought this was pretty hypocritical and not reflective of either the risk or the current attitude being portrayed by the Govt.”
Take care – Gary.