The Insurance Council of Australia (ICA) has called for the Queensland Government to reconsider plans to increase stamp duties on general insurance products by 1.5%.
Rob Whelan, CEO of the ICA, said the mooted stamp duty rise was unfortunate and would add to Queenslanders’ cost of living by forcing up the price of insurance.
He said the reported rise from 7.5% to 9%, taking effect from 1 August, could increase the level of underinsurance and non-insurance in Queensland, especially in areas regularly exposed to cyclones and floods.
“Stamp duties are inequitable, highly inefficient and unfair. An increase in stamp duties would be a counterproductive decision that would only exacerbate the financial pressure many Queenslanders are experiencing with the cost of insurance and other household expenses,” Whelan said.
“You cannot improve insurance affordability by increasing insurance costs. Underinsurance and non-insurance are not desirable, especially with so many communities still recovering and rebuilding from the series of natural disasters that struck Queensland in 2011, 2012 and 2013.”
Whelan said the recent increases in insurance prices had reflected the levels of risk and soaring cost of claims and demonstrated the need to maintain adequate insurance cover, particularly in areas subject to extreme weather events such as tropical North Queensland.
“Tax reform, investments in mitigation, better land-use planning and upgrading building codes are all measures governments can take to reduce the pricing pressures on insurance,” he added.