News

Queensland Stamp Duty set to rise

News >>

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

Comments

  1. None Found

Add Comment

Latest News

Illegal or unsuitable cladding now a big issue

Why we have laws, regulations and Australian standards? Because some people just do the wrong thing all for the sake of making money. The cladding issue is the subject of 4 Corners program on the ABC.

We are already seeing Insurance policies now placing exclusion endorsements into their policies excluding and claims relating to illegal cladding. We are seeing Governments demanding Audits of all existing buildings above a certain height. There are accusations of Builders taking other short cuts such as on Wiring, Pipes and sprinkler systems. 

The question is, who is to blame? Who will take responsibility?

read more

Small business in NSW

Right after the NSW Government have reimposed Fire Service Levies, they have at least made an effort for small business. The government has announced it will abolish stamp duty on a number of policies taken out by a small business. This is an important change.

What is a small business? In order to gain the exemptions, the business must be a small business for Capital Gains Tax Purposes for the income year in which the insurance is effected or renewed. A small business for CGT purposes is: “an individual, partnership, company or trust that is carrying on a business, and has an aggregated turnover of less than $2 million.”

read more