THE State Government has paused the working group tasked with reforming Tasmania’s fire levies.
“There is no unanimous agreement on the design of a new funding model, despite constructive and positive conversations and engagement,” Police, Fire and Emergency Management Minister Felix Ellis said. “We all agreed that fire, floods, and storms pose an increasing threat to Tasmania and that contemporary governance structures are required to deliver this.”
The Minister thanked representatives from business, industry, local government, unions and community leaders who have participated in the working group.
The Insurance Council of Australia (ICA) expressed concern over the government’s decision to halt The Fire Service Levy (FSL) reform efforts. Tasmania is the only region in Australia continuing to fund fire and emergency services through taxes on insurance customers.
The ICA argues that the FSL which can increase the cost of various commercial insurance policies by up to 28 per cent disproportionately affects those seeking to insure their assets against fire damage. This levy was criticised for raising the operational costs for Tasmanian businesses and generating significant revenue for the government.
The ICA said in statement that Tasmania’s move contrasts with actions taken by other Australian states, which have either eliminated or are in the process of removing their respective fire and emergency services levies on insurance.
“Every other state has abolished or has committed to abolishing similar levies, leaving Tasmania as the last tax standing, further disadvantaging its businesses and their customers,” ICA CEO Andrew Halls said.
“Not only is the FSL unfair,
but it also discourages proper insurance coverage. Abolishing it would enhance affordability and encourage more businesses to adequately insure their assets, ultimately benefiting the entire community.
“We strongly urge the next Tasmanian government to continue to work to abolish this unfair tax on insurance customers in the state.”
The government planned to alter the levy collection method for funding fire and emergency services, aiming to reduce taxes for urban residents but modelling indicated increases for rural and regional residents.
Tasmanian Farmers and Graziers Association president Ian Sauer noted one proposed model would raise farmers’ contributions by 1000 per cent, while another would increase them by at least 230 per cent. Following public out cry, the government established a working group to devise a mutually acceptable new fire levy model.