VICTORIAN GOVERNMENT SET TO LIFT REGIONAL FIRE SERVICES LEVY
The Victorian government has indicated that it will lift the regional and rural fire services levy for businesses from 63 per cent to 84 per cent to cover extra fire fighting costs as a result of the disastrous bushfires last February.
This compares with a fire services levy of only 48 per cent for businesses in metropolitan Melbourne with a further suggestion that this is likely to drop.
This increase will unfairly add to the cost of operating a business in regional and rural Victoria and could result in lost jobs!
For example, the annual increase in the fire insurance premium for a leading manufacturing company in Geelong, if the levy is lifted, will be more than $130,000!
Insured businesses and house owners pay the fire services levy, stamp duty and GST for Victoria’s fire fighting services. Uninsured people in Victoria don’t pay anything but still get the use of its fire services if their properties catch fire.
Fire services levies are only charged in two other states in Australia. They are New South Wales and Tasmania but both of them have significantly smaller levies than Victoria at 36 per cent and 28 per cent, respectively. All other states have abolished fire services levies because of their unfairness to property owners who act prudently by insuring their properties!
According to the National Insurance Brokers Association (NIBA), Victoria is actually the highest taxed place in the world when it comes to fire insurance! This follows with its fire services levies, stamp duty and GST added to the insurer’s premium and the levy.
There are two serious aspects to the fire services levy increase. The first is that regional and rural Victorians have to pay more than their Melbourne counterparts to support their fire services.
The second is that businesses and home owners in Victoria have to keep propping up its fire services through increased levies and stamp duty fees while uninsured premises still get the benefit of the fires services!
Both situations are, clearly, inequitable!
No one will argue that adequate and efficient fire fighting services are essential. This need was clearly demonstrated throughout the last fire season in Victoria when bushfires claimed many lives and thousands of homes and buildings were burnt out.
However, the major payers of the fire services levy are businesses and houses that are situated in cities and towns, including Melbourne and Geelong, that are unaffected by bushfires.
These property owners should not have to pay for the necessary upgrading of fire fighting services for bushfire-prone towns and forested areas. Nor should uninsured property owners escape paying for fire fighting services that help them when they are needed.
According to NIBA, the Victorian government derives about seventy-five per cent of its funding for fire services from fire services levies and charges which is a probable reason for many people not taking out fire insurance or for under-insuring their properties.
It is estimated that about thirty per cent of homes in the last bushfires were not insured and the high fires services levy added to the fire cover premium could have been some of the reason for this.
The cost of fire fighting services should be spread fairly across all property owners in Victoria and this could be in the form of an extra charge on property rates.
The Victorian government should follow the lead of the other states in Australia that abolished fire services levies and funded their fire fighting services from general revenue.