Consumer Action welcomes the opportunity to make a submission to the Economic Development and Infrastructure Committee‘s Inquiry into State Government Taxation and Debt.
The Inquiry terms of reference require the Committee to consider and report on the impact and effectiveness of increased State Government taxation (including land tax, payroll tax, stamp duties, State Government taxes and charges and development levies) and increased State Government debt on Victorian development, competitiveness, sustainability, employment, job creation and small businesses.
In this submission we concentrate on one particular type of taxation, being the state taxes and charges levied on home building and content insurance policies. While we do not necessarily support the high level of taxes and charges now imposed on these insurance policies – there is some merit in the arguments both that they have grown too large and that they are levied on too narrow a base – we strongly disagree with claims that the impact and effect of these taxes and charges is a high rate of under-insurance or non-insurance of Victorian property.
Such claims are assumptions that ?sound like they would be right? but are, in fact, questionable on the evidence. By contrast, there is evidence that other, more significant factors are contributing to rates of under- and non-insurance in the community, which have been ignored or understated by the insurance industry.
We submit than any recommendation regarding insurance taxation should be made by the Committee only after considering all the available research and information on this issue, including research which indicates that insurance taxes and levies may not contribute to rates of under- or non-insurance in the community to a significant degree and that other factors may be much more significant contributors to levels of under- or non-insurance.
To read our submission, click here: Inquiry into State Government Taxation and Debt.