States may lose insurance stamp duties
The Federal Government has signalled it will pursue the abolition of State Government stamp duties on insurance products.
The Assistant Treasurer, Senator Josh Frydenberg has signalled the Government's intentions in an address to the Insurance Council of Australia in which he has described the stamp duties as one of the most inefficient taxes in Australia.
Frydenberg said the issue was being canvassed in the context of the Tax White Paper which was being run in conjunction with the Federation White Paper.
He said the State Government stamp duties on insurance products were inefficient because they added to the cost of insurance and could lead to under-insurance or non-insurance — something which left people more vulnerable.
"Numerous state government reviews — such as New South Wales' 2011 Financial Audit and the Victorian Competition and Efficiency Commission's 2012 Inquiry into state-based reform — have supported the abolition of these taxes," Frydenberg said. "Yet State Governments still raise around $5.7 billion per year from insurance taxes. This is around 8 per cent of total state tax revenue. I do note that the Australian Capital Territory plans to abolish duty on insurance on 1 July 2016.
The minister pointed to the fact that a discussion paper would be released shortly, calling for submission, and he encouraged participation in the Tax White Paper process.
Recommended for you
The Federal Court has dismissed a conflicted remuneration case brought by ASIC against the director of life insurance distributor Freedom Group, where Bali holidays and Vespa purchases were among sales incentives.
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
