New fire levy may add $450 a year to rates

New fire levy may add $450 a year to rates

28 October 2011

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Australia — GEELONG residents could face rate rises of more than 30 per cent or $450 if local councils become collectors for a new fire tax.

The new property tax would replace the current Fire Services Levy (FSL), which is included in all fire insurance premiums.

The change was one of the recommendations of the Black Saturday Bushfires Royal Commission, which found many properties were not insured or under insured because of high premiums.

The City of Greater Geelong has joined other councils in its opposition to the proposal that the levy be added to rate bills, which appears to be the State Government’s preferred option. The alternative would be to have the money collected by the State Revenue Office.

Municipal Association of Victoria president Bill McArthur said councils were united in their opposition to becoming collection agencies for the new levy.

“It’s unclear how the state intends to ensure a fair system is delivered given that, in general, properties with low land values in high risk areas are likely to have their contribution reduced, while those with high land values in low risk areas could see their contribution increase,” Cr McArthur said in his news-letter.

“Even using the MAVs preferred CIV (Capital Improved Value) valuation base, our analysis shows that the average rate increase would be 19 per cent, and in excess of 30 per cent in some municipalities.

“Councils could be left explaining a state tax and dealing with the backlash from communities, and it would severely limit our capacity to raise revenue for local priorities.”

CoGG’s finance councillor Bruce Harwood said yesterday the onus was on the State Government to clearly define the levy, and state that it was not a council charge.

“They should say it is a State Government charge and the reason why it is appearing on the rate notice,” he said.

“I understand where the State Government is coming from with the mechanism, but I don’t necessarily agree with the reasoning.”

A spokeswoman for State Treasurer Kim Wells said the department was working through more than 100 submissions on the proposal.

She said the submissions covered a range of complicated issues, including how the levy should be calculated.

The current residential FSL for country Victoria, which includes Geelong, is a 32 per cent surcharge on household insurance premiums..

A public forum on the issue will be held at the Geelong Masonic Hall in Regent St, Belmont, at 2pm on Monday, November 14.

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