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Queensland Stamp Duty set to rise

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Did you know Queensland Government to reconsider plans to increase stamp duties on general insurance products by 1.5%.

It has been reported that stamp duties will rise from 7.5% to 9%, taking effect from 1 August 2013.

The problem with such stamp duty rises is that it adds to Queenslanders’, cost of living by forcing up the price of insurance. This leads to an increase in the level of underinsurance and non-insurance in Queensland, particularly in areas regularly exposed to cyclones and floods who are already facing increases in base insurance premiums along with the multiplying effect of such taxes.

The fact is, Stamp duties are inequitable, highly inefficient and unfair.

Any increase in stamp duties is counterproductive and will add to the financial pressure many Queenslanders are already experiencing with the cost of insurance and other household expenses. Food, fuel, health insurance, council rates and Power Bills are all adding to such pressure.

We need to improve insurance affordability by decreasing insurance costs. Underinsurance and non-insurance puts future pressure on governments through the social security system and on charitable organisations when those un-insured suffer losses and look for hand outs. With a GST of 10% and a stamp duty of 9% on both the Insurance premium (and the stamp duty is actually added on top of the GST also), it works out to an extra 20% in government taxes on insurance. For every $100 in insurance premiums, you are adding $19.90 in extra tax! We should be encouraging Queenslanders to take out insurance as more than 40% do not take out insurance or adequate cover.

We have so many communities still recovering and rebuilding from the series of natural disasters that struck Queensland in 2011, 2012 and 2013, they are being hit with rising insurance premiums exacerbated by increased taxes on insurance. The last thing we need to do is to make insurance on people personal property and their struggling businesses with even higher increases in insurance prices.

 In areas subject to extreme weather events such as tropical North Queensland experiencing soaring cost of claims, there is a need for governments to demonstrate the need to maintain adequate insurance cover.

Apart from seeking to add to insurance costs, governments should be investing in flood and surge mitigation, better land-use planning and upgrading building codes are all positive measures governments can take to reduce the pricing pressures on insurance, and ultimately this will save Governments more in the long run instead of adding additional taxes to those sensible enough to protect their risks with insurance.

  

Last changed: May 28 2013 at 5:17 PM

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