If the NSW Government get it so why doesn’t the Victorian Government?

On the 8th July I posted an article advising that the New South Wales Government had recently released a Funding our Emergency Services Discussion Paper as part of a three month consultation period to identify a better way to fund emergency services in NSW. Included in the article was a link to this Discussion Paper (www.haveyoursay.nsw.gov.au/ESL .)

What pleases me greatly me on the one hand and staggers me on the other is that this document at the very start of the consultation process states:

An abrupt replacement of an insurance based system with a system based on land values could cause some households and businesses to delay renewals on their insurance until the insurance levy is abolished.

Depending on timing, individuals could pay an additional component in their insurance premiums, and pay a property based levy for the coming year just a short time later.

To avoid incentives to delay the purchase of insurance, insurance companies could be required to reduce their surcharge on insurance premiums by 1/365th per day. A compulsory scheme would require a defined methodology under which insurance companies would pass on the reduction.” [refer page 25.]

Whether doing the transition on a day by day basis or on a monthly basis in line with a insurers monthly renewal run is something I am sure the insurers will discuss with government.

The staggering part is that while the NSW Government discussion paper picked this important issue up from the start it was completely overlooked by the Victorian Government who continue to insist that the insurance industry meet the full $580 million tax liability for Fire Service Levy, plus the 10% GST and the 10% State Government Stamp Duty for the full financial year meaning that Insureds are expected to pay the tax twice. Once with their insurance, and as from July 2013, with their property rates for the period from 1 July 2013 to the next renewal of their insurance.

As the NSW Government discussion rightly predicts, this will lead to people not increasing their insurance as they should or worse still not insuring until 1 July to avoid completely the double tax.

Does this mean that the politicians and public servants are smarter in New South Wales or is it the Victorians are less caring or greedier? When I read through all the material the Victorian Government put out, buried back in an Appendix (iv.) (See below).

This clearly shows that they do understand the issue. They just did not want to lose revenue. If they had done the transition with property rates there would have been no shortfall. That is the crucial part which is causing everyone so much grief.

2 responses to “If the NSW Government get it so why doesn’t the Victorian Government?”

  1. Max says:

    The NSW people look to be all over Ted and his mates on this.

  2. Royce Perrault says:

    This was precisely the answers I””d been searching for. Amazing blog. Your posts are so helpful and detailed. The links you feature are also very useful too. Thanks a lot 🙂

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