Victoria’s fire services levy (FSL) on insurance premiums is rising again, with reports the State Government has abandoned a transition period under which the FSL would be dropped in favor of a property-based levy. Last week QBE advised brokers that the levy for fire, industrial special risks and consequential loss would rise to 95% from 85% for Victorian country clients and to 54% from 44% for Victorian metro clients, effective immediately. The levy has already risen 30% in country areas this financial year to contribute $416 million for new equipment and other improvements to the Country Fire Authority. Victoria already imposes the world’s highest levels of taxes on insurance premiums. The record rates of the FSL are made worse by cumulatively adding GST and then stamp duty to the total premium. NSW clients’ premiums, which are also affected by an FSL levy, will be unchanged this year at 36%, while Tasmanians will pay a levy of 28%, which is also unchanged. Insurers are not commenting while negotiations with the Victorian Government continue, as there are talks the Victorian Government intend to instruct insurers to charge a full year’s levy on annual premiums prior to July next year, when the levy will switch to collection based on property ownership.  It has previously said there will be a transition period from July this year to allow insurers to phase out the levy. The Insurance Council of Australia says it is awaiting the tabling of the legislation that abolishes statutory insurance contributions to the fire services and will pass on this information as it comes to hand. References: NIBA chief: ‘antiquated’ fire services levy at fault in new rates row IRP Online 30 Apr 2012 FSL to rise again as Victoria has a $600 million change of mind 30 April 2012

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