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The levy increase is far more complex in NSW: Victoria’s John Brumby with NSW Premier Kristina Keneally
notice, as was the case in Victoria. Mr Brumby was forced to act by the final report of the Victorian Bushfires Royal Commission, which examined the fire services levy system in detail and found it inequitable and lacking in transparency [see following story]. The world-record insurance taxes Victoria imposes on property insurance premiums – rural businesses are paying 122% more than the premium in added-on taxes – have forced people in rural areas to deliberately underinsure or not insure at all, and that was an issue at royal commission hearings. After a decade of Labor Government, voters are being asked to give Mr Brumby and his colleagues another four years in government when they go to the polls on November 27. And the voters who gave him the power are the same ones who are now poised to take it away: the rural constituency. Despite accounting for just 10% of Australia’s total population – 5% in Victoria – regional voters hold considerable power in politics. Country independents carried Labor to an indecisive victory at the federal level and the regional vote in Victoria will once again be pivotal. Mounting anger over the Brumby Government’s handling of the 2009 bushfires threatened a rural backlash akin to that unleashed upon Jeff Kennett 10 years earlier, when the popular premier was swept from power by the rural electorates. 12
Mr Brumby’s decision to abolish the fire services levy – a property-based system will replace it on July 1 2012 – was as swift as it was unexpected.
“This reform will ensure that our fire services are funded more sustainably while also taking the squeeze off the cost of property insurance” He had given no prior indication that the bushfires royal commission’s recommendation 64 would be accepted. In fact, with yet another government inquiry into the levy insuranceNEWS
system already at work, he had the perfect alibi for stalling once again. That’s why, after nearly 10 years of rejections, denials, anti-insurer hostility and internal government “inquiries”, Mr Brumby’s announcement that the levy will be replaced by mid-2012 came as such a shock. In all things political there’s a need for spin, and Mr Brumby’s political conversion certainly deserved a good bit of it. Treasurer John Lenders provided plenty with a statement following Mr Brumby’s announcement that he would accept all but one of the royal commission’s recommendations. “The Brumby Labor Government is taking the tough decisions and doing the hard work to keep Victoria fire-ready and safe,” Mr Lenders said. “This reform will ensure that our fire services are funded more sustainably while also taking the squeeze off the cost of property insurance. “However, the royal commission was silent on the fine details of how the levy would operate and our government will work through how such a levy would be applied. “We want to ensure that the necessary funds are raised to sustain our crucial fire services. “This reform will ensure that everyone who has a property protected by our worldrenowned firefighters contributes to their budgets.” Volume II, Part II of the 2009 Victorian
L October/November 2010
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