New minister urged to scrap agricultural insurance stamp duty

New minister urged to scrap agricultural insurance stamp duty | Insurance Business

New minister urged to scrap agricultural insurance stamp duty
New agriculture minister Mark Furner has been urged to prioritise the abolishment of stamp duty on agricultural insurance in Queensland, in the wake of the Boxing Day storms that caused widespread damage to crops on the Burnett and Darling Downs.

Scrapping the tax, which drives up the cost of insuring crops, would not only help mitigate against natural disasters, but would also benefit the government, according to an advocacy group leader.

Stuart Armitage, Queensland Farmers Federation (QFF) president, said getting rid of stamp duty on crop insurance “should be one of the first things the incoming agriculture minister should do,” for “that is nothing but a tax and there is no way people should have to pay a duty or tax on any effort to help them get through a disaster,” North Queensland Register reported.

Armitage said stamp duty alone was costing some cotton growers in the Darlings Downs some $10,000 to $50,000 annually – “a pretty big number for some of the bigger operators in this part of the world.”

The advocacy leader said he expected that about only half of the growers who were impacted by the Boxing Day storm had crop insurance.

“For a 10% price reduction to the cost of insurance, it would make it more palatable to land holders to mitigate against risk,” Armitage told the publication. “On behalf of the QFF, and in particular the cotton and also grain industries this time, the government needs to do what they have done already in Victoria and NSW which is get rid of it. I think it’s incumbent upon the landholders to remove risk by insuring if they can afford it, but it’s also incumbent on the government not to tax, which decreases the willingness to take out insurance.”

Armitage said the government would also benefit from ensuring agricultural assistance was affordable to farmers, as it would mean less reliance on the public purse in times of disaster.

“If we’re looking at further disaster insurances now, for frost or drought insurance, if these sort of insurances became an affordable reality, then the government may be able to close the door on things like drought assistance,” Armitage said. “It’s a big advantage to [the] government. We were fully insured two years ago when we got wiped out, and our operation didn’t take a backward step. We were able to continue to spend into the community as we normally did, so a disaster like that does not necessarily have that flow on effect.”

Armitage said both major parties had committed to looking at policy change surrounding agricultural insurance stamp duty during the state elections campaign, and that it was time that they make true on that promise.

“It is something we’ve been asking for a number of years and they [major parties] picked it up in our election campaign policy,” the QFF president said. “They’ve asked QFF for the costing of it and we’ve done it since the election. I think we can realistically expect the removal of stamp duty within the next six months and it is something the incumbent agricultural minister should be looking at, at his earliest convenience,” North Queensland Register quoted him as saying.

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