Question by Mr Ryan to Mr Brumby

QUESTIONS WITHOUT NOTICE

Insurance: fire services levy

Mr RYAN (Leader of The Nationals) — My question is to the Premier.
I refer to comments by the Premier in the house on 5 April this year in response to the opposition’s request that the fire services levy be referred to the Henry review of Australia’s tax system, when the Premier said:

In relation to the Henry review, as I have said, it —
that is, the fire services levy —

is not a tax, so it would not be referred.

I further refer to a letter dated 13 June 2009 directed to me by Rob Heferen, the head of the secretariat of the Henry review, which states:

I can assure you that the panel is reviewing, along with other taxes and transfers, the fire services levy imposed on insurance companies.

And I ask: will the Premier now put aside his personal prejudice and ensure that Victoria cooperates fully with the Henry review in its investigation of the fire services levy — this unfair and inequitable tax?

Mr BRUMBY (Premier) —
I think it is clear from the correspondence the honourable member has, which I have not obviously sighted, that the Henry review has accepted submissions in relation to this matter and, since submissions have been made, it will consider the matter. I will reiterate the comments that I have made previously, but I will not go into detail with them again, of course. It has always been the case and a longstanding tradition and precedent under successive governments that the insurance industry makes a contribution to the cost of fire protection in our state, and the best way of doing that is through a risk-based levy. Since insurance companies are in the business of best understanding risk, it is best that they set, across insurance policies, that levy rather than government doing it. That has always been the case.

Having said that, I have made it quite clear that in relation to the recent bushfires in our state and the issue of lack of insurance or underinsurance it is the government’s clear intention to lift aggregate levels of insurance cover across the community. It is a matter on which the state Treasurer, Mr Lenders, is currently focused, and we will have further discussion of options and considerations in relation to this matter in the near future.

To read the full story click on the TITLE above, go to page 44.
Your comments welcome on both the question and the answer.
It looks like we will need to wait for the Henry review or Mr Lender to focus his attention on this matter before we move forward with this unfair way of funding the fire services.