Townsville city council is calling for immediate state and federal government taxation reforms as well as a case study of the city’s flood disaster to address the crippling household premiums in Northern Australia, which was already confirmed to be twice as much as those in other parts of the nation.
The council proposed the actions as part of its detailed submission to the Australian Competition and Consumer Commission’s (ACCC) inquiry into insurance costs in Northern Australia.
Townsville Mayor Jenny Hill said the high cost of premiums in the north is also due to the way GST and stamp duty are levied on insurance policies.
“As if paying double for our premiums isn’t bad enough, the problem is compounded by the fact that the state and federal governments also apply stamp duty and GST charges on top of this impost. Why should the north pay double the tax on our insurance?” Hill said. “In [the] council’s submission, we’re saying that the taxes should be levied on the insured amount rather than the insurers calculated premium which is currently the case. But we also need the insurance industry to give people a fair go.”
The proposed case study seeks to help “reduce the impact of insurance costs and shine a light on the shortcomings of the insurance industry” – an idea the Townsville mayor said is supported by the Insurance Council of Australia.
“Detailed data on the plight of the north on insurance is important to reduce the impact of insurance costs and shine a light on the shortcomings of the insurance industry,” Hill said. “That’s why the enormous impact of this year’s natural disaster and the experience of the city’s residents, both good and bad, is a prime opportunity for the ACCC to conduct a sub-regional case study on the city. Our submission puts forward the call for the ACCC to work with council, the community, and the insurance industry to reduce the impact of insurance costs. As part of our broader recovery effort, the council is liaising with insurers, residents, and the Insurance Council of Australia on the insurance Industry’s response.”