NIBA has urged State Government leaders attending today's Tax Forum to remove a major factor in underinsurance and non-insurance by scrapping taxes, which can double the cost of protecting people’s property - and an advert placed in today's Financial Review aims to further hit home that message.
The advertisement, on page 17 of today's issue, concisely sets outs NIBA's position on a number of tax reform issues, including the Fire Services Levy, GST and Stamp Duty.In it, NIBA states its belief that the guiding principles for taxation should be that they are efficient, equitable, simple, and transparent.
According to the Federal Government's Tax Reform Discussion Paper, insurance taxes raised about $4.6 billion in state revenue in 2009-10 and accounted for 8% of state tax revenues.
NIBA CEO Dallas Booth said there was no dispute that multiple taxes on insurance were an inefficient way of raising revenue and discouraged businesses and householders from protecting themselves and their assets.
"Over the past decade a Royal Commission, the Henry Tax Review, State Government reviews and numerous commissioned studies have all acknowledged the link between insurance taxes and the alarmingly high incidence of underinsurance and, even worse, non-insurance in the Australian community," Mr Booth said. "This is something that the Tax Reform Discussion Paper itself acknowledges."
Mr Booth added that NIBA accepted that the subsequent loss of revenue would have to be replaced, but urged strong leadership from all tiers of Government to seize the opportunity for reform.
"A great deal of technical work has been done by highly skilled economic analysts on maintaining the integrity of State finances through more efficient, broad-based taxes.
"The most recent analysis, by the Allen Consulting Group, showed that by replacing these imposts with new or increased broader based taxes, gross domestic product would grow by almost 2%.
"GST and Stamp Duty adds more than 20% to every policy in Australia. This is a great opportunity for all Governments to introduce reforms that will encourage more people to protect themselves in the event of a crisis."
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