Fire Services Levy: time for a change


The 2009 Victorian Bushfires Royal Commission has recommended that the state replace the Fire Services Levy with a property-based levy as the current system – a tax on insurance companies that is, in turn, levied on insurance premiums – is inequitable.

The levy is used to fund the fire services.
 
The inequitable nature of the levy has been highlighted in the aftermath of the catastrophic fires in Victoria last year. The State Government has suggested that only around 87 per cent of affected households and property owners had adequate levels of insurance.
 

The outcome of this is that, while the entire community is able to access the services of either the MFB or the CFA, only those citizens who take out the suitable level of insurance are contributing to the scheme at adequate levels, so not everyone is paying their fair share for this critical service.
 
But as a public service the MFB and CFA fought these fires and did not discriminate against properties depending on their level of insurance.
 
This is not a new issue; the REIV, along with many other organisations, has called for reform of the levy over the past decade and it would welcome reform.
 
The State Government has, thankfully, already started the process.
 
Earlier this year they released a green paper canvassing a number of options, including the one recommended by the Royal Commission.
 
The REIV has responded to the green paper arguing for a property-based levy and, as a result, we look forward to the acceptance and implementation of this recommendation.