Last week’s announcement by the Brumby Government of a review of the
Victorian Fire Services Levy (FSL) has been welcomed by Nationals Member
for Benalla, Bill Sykes, albeit with doubts about the Brumby Government’s
commitment to the review.
Dr Sykes, who has been calling for such a review for over five years, said
that he suspects that Premier Brumby is simply playing politics with fire
services funding.
Dr Sykes said, “The current FSL on general insurance policies is grossly
inequitable – the two thirds of people who insure, pay levies of up to 84
per cent, whilst the one third of people who don’t insure make no direct
contribution to the fire services.
“Further, country property and business owners pay an 84 per cent levy
whereas city home owners only pay a 20% levy – and most of the country
people paying high levies are the first ones to jump on the CFA truck when
fires start.
“Given that the value of CFA volunteers’ time is estimated at around $600
million per year, and given that much of the fire fighting is being done on
public land, the current FSL is clearly inequitable.”
Dr Sykes continued, “The FSL covers 77½ per cent of the costs of fire
services, the other 22½ per cent is paid by State Government (and Local
Government, in the case of the MFB).
“Weekly Times journalist Peter Hunt reviewed the FSL on 26 August 2009 and
he noted
The Victorian government is earning more in stamp duty on farm business and
household property insurance than it contributes to the state's fire
budget.
The government's 2009 budget papers show it expects to earn a whopping $677
million in stamp duty on all types of non-life (property, motor vehicle,
mortgage and other) insurance this year.
Analysis by the Weekly Times shows about a third of the stamp duty - $225
million – is collected for fire-related property insurance. Yet this
financial year the state government will contribute just $88 million to the
Country Fire Authority’s (CFA) budget and $34 million to the Metropolitan
Fire Brigade (MFB) budget, while Treasury pockets the remaining $103
million in stamp duty revenue.
Dr Sykes said, “The Insurance Council of Australia (ICA) and the Victorian
Farmers Federation (VFF) and some local councils support a property based
levy as occurs in Western Australia.
“Every property owner pays a levy which means the levy per owner is much
less than the current Victorian system where two thirds of people who
insure have to pay the costs for everyone including the one third who don’t
insure.”
Dr Sykes said that he was intrigued by the timing of Mr Brumby’s
announcement given that only one month ago he had ridiculed Peter Ryan,
Leader of The Nationals, in Parliament about the Nationals call for a
review of the FSL.
“I wonder if Mr Brumby has got a ‘heads up’ that the Federal Government’s
Henry Review of Taxation (which includes a review of the FSL at the request
of Mr Ryan) is going to come up with recommended changes to the funding of
fire services.
“Equally, the Bushfire Royal Commission, due to make its final report in
mid 2010, could well include recommendations on the funding of fire
services.
“I’m prepared to have a little wager about the timing of the report on the
review – if it’s good news for Victorians we’ll hear about it before the
next State Election in November 2010 and if it’s bad news we won’t hear
about it until after the election – any takers?”
Bill Sykes MP, State Member for Benalla
Shadow Parliamentary Secretary for Agriculture & Water
2/55 Carrier Street, Benalla 3672
Ph: 03 5762 2100 Fx: 03 5762 4478 Mobile: 0427 624 989
Email: bill.sykes@parliament.vic.gov.au
