Wednesday 13 Jun 2012
The New South Wales Government has announced a review of the funding arrangements for fire and emergency services, 74% of which is made up from the Fire Services Levy (FSL) collected as part of insurance premiums. A discussion paper is to be released calling for comments by all interested parties by 30 September 2012 and you are encouraged to participate.
The Government's announcement is a move in the right direction after years of lobbying for the removal of taxes on strata insurance by the insurance and strata industry. A string of reviews have been published in recent years examining alternative options for funding the fire and emergency services: The Henry Tax Review (‘Australia’s Future Tax System’); the NSW Independent Pricing and Regulatory Tribunal’s review of state taxes and the 2009 Victorian Bushfires Royal Commission have all suggested that insurance taxes should be replaced with a tax on property values.
For each $1,000 of base property premium, CHU NSW strata customers are paying taxes totalling of $450 (45%) and $631 (63%) :
FSL GST Stamp duty Tax-on-Tax impact
- Commercial strata 36% 10% 9% 45%
- Residential strata 21% 10% 9% 63%
CHU has long argued that the system of taxing strata insurance is economically inefficient and unfair to Owners Corporations. People who are not insured do not contribute to FSL, but nevertheless receive the same benefits as those who are insured. Please watch out for the Government discussion paper calling for comments. CHU will provide an ‘Update’ outlining its position on some of the issues and you are encouraged to put forward your views directly to Mike Baird, NSW Treasurer, or via the SCA (NSW).
State Manager – NSW/ACT