ICA urges Queensland to cut insurance stamp duty as premiums soar
ICA urges Queensland to cut insurance stamp duty as premiums soar | Insurance Business Australia
Insurance News
ICA urges Queensland to cut insurance stamp duty as premiums soar
Report released ahead of October state election
Insurance News
By
Roxanne Libatique
The Insurance Council of Australia (ICA) has called on the Queensland government to abolish stamp duty on insurance premiums, stating that the change could reduce costs for policyholders by up to 8%.
The recommendation is part of the ICA’s A Stronger Queensland report, released ahead of the October state election, which outlines a series of policy reforms aimed at making insurance more affordable and improving disaster resilience.
Queenslanders are currently subject to both the Goods and Services Tax (GST) and stamp duty on their insurance, with the latter expected to generate $1.7 billion in the 2023-24 financial year. This marks a sharp increase from just over $1 billion in 2019-20.
Over the past five years, Queenslanders have paid a total of $6.4 billion in stamp duty on insurance premiums.
Insurers have paid out approximately $4.5 billion in claims related to natural disasters in the state over the past three years alone.
Kylie Macfarlane, chief operating officer of the ICA, emphasised the financial burden of taxing insurance premiums.
“At a time when insurance is needed more than ever, it’s madness that state governments tax homeowners and renters for taking out insurance to protect themselves,” she said.
She said that eliminating the 9% stamp duty would be the most direct way to reduce premiums for consumers.
ICA’s recommendation if the government retains stamp duty
Should the government choose to retain stamp duty, the ICA is pushing for revenue from the tax to be invested in disaster mitigation initiatives.
According to ICA research, a five-year, $730 million investment in such projects would lead to $6.3 billion in savings.
ICA’s policy recommendations
The report also included recommendations for:
updating land-use planning to restrict development in high-risk areas
strengthening building codes to enhance resilience
standardising post-disaster waste management
improving data collection and flood mapping to aid in disaster response
Additionally, the ICA has proposed changes to allow interstate tradespeople to work in Queensland after disasters to help meet the increased demand for repairs and rebuilding.
Australians face surging home insurance costs
On a national level, rising insurance costs have become a significant issue for homeowners.
The broader issue of insurance affordability continues to grow, particularly in high-risk areas.
Households in regions like southeast Queensland and Northern New South Wales have seen premiums rise by more than 30%, driven largely by increasing risks from floods and cyclones.
On average, Australian insurers paid out $2.1 billion annually for weather-related claims in the late 1990s, a figure that has now doubled to $4.5 billion over the past five years.
As weather patterns worsen, the ICA is urging the Queensland government to implement the 12 policy recommendations outlined in A Stronger Queensland to address both the immediate issue of insurance affordability and the long-term challenges posed by climate change.
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