The Federal Government has urged Western Australia, Queensland and the Northern Territory to scrap “inefficient” stamp duties on insurance.
Stamp duty and other levies placed on insurance policies have been a bug-bear for the industry for years and the Federal Government has renewed its call for the levies to be dumped in their response to the Northern Australian Insurance Premiums Taskforce and Senate Inquiry this week.
“The Government continues to urge the Western Australian, Queensland and the Northern Territory governments to abolish inefficient stamp duties, strata commissions and other levies on general insurance premiums,” Kelly O’Dwyer, minister for revenue and financial services said in the official response.
“These taxes increase the cost of insurance for policyholders and can lead to under or non-insurance. Removal of these taxes by the Western Australian, Queensland and the Northern Territory governments would see an immediate reduction in insurance premiums for policyholders.”
O’Dwyer said that if Queensland removed its stamp duty, policyholders would see an immediate 9% reduction in pricing.
While affordability issues are more pronounced in disaster-prone areas of the country,
Dallas Booth,
NIBA CEO, said that the increase in pricing for at-risk communities mirrors the rise of insurance levies and taxes.
“We have pointed out that at the time premiums in North Queensland really started to go up quite dramatically, the Queensland Government increased the stamp duty,” Booth told Insurance Business. “It was absolutely the wrong time to increase stamp duties and they finished up with a massive windfall of revenue which they would not have been expecting.”
Calling stamp duty a “cost burden” for consumers and policyholders, Booth said that the Queensland government “really need to think very carefully about returning some of that windfall revenue back to the community through lower stamp duty, particularly in the northern part of Queensland.”
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