ICA concerned over New South Wales’ budget impactJune 19 2019 by InsuranceAsia News Staff
The Insurance Council of Australia (ICA) has said the market is concerned about the costs to households and businesses of the New South Wales 2019 budget.
It claims the revenue the government expects to raise from insurance taxes and levies will continue to place an unfair burden on the state’s policyholders.
Overall the ICA has welcomed the New South Wales 2019 budget, which emphasises solid operating surpluses, fiscal responsibility and strong infrastructure spending.
Revenue from insurance stamp duties and the Emergency Services Levy (ESL) will increase by 5.4% a year over the next four years, A$8.6 billion (US$5.9 billion), compared with annual inflation of 1.3%.
The budget shows continued over-reliance on both the ESL and stamp duties, which the ICA said numerous reports and inquiries have concluded are “unfair, inefficient and inequitable”.
From July 1, New South Wales households will often be paying more than 50% in taxes on insurance on renewals and new policies; as a result, typical household premiums will rise by between A$60 to A$100 this year.
However, according to the ICA many small businesses and primary producers will be hit hardest. The combination of GST, stamp duty and ESL will result in these sectors paying up to 70% in taxes on their insurance policies.
The ICA wants the government to restart the ESL reform process, which was abandoned in May 2017, in consultation with the insurance industry, independent tax experts, local government, small business and other key stakeholders.
While the New South Wales government is making a A$600 million provision for firefighters’ workers compensation through increases in the ESL over the next four years, The Australian this week revealed a similar scheme in Queensland has cost only A$11.2 million over the past three years.
- November 15
Hong Kong’s independent regulator has had a bumpy ride.
- November 12
New Zealand's Reserve Bank to conduct a review of the Insurance Act next year.
- November 11
The move to simplify the governing structure will happen next June.
- November 6
The troubled insurer is understood to be in discussions with several potential investors.