$100 fire levy to hit all property owners

$100 fire levy to hit all property owners

02 May 2013

published by www.watoday.com.au

Australia — All Victorian property owners, not just those with insurance, will pay at least $100 a year to fund the state’s fire services under a major overhaul of the way the MFB and CFA are resourced.
Treasurer Michael O’Brien says the new ”fairer” way to fund the CFA and MFB, as recommended by the Victorian Bushfires Royal Commission, will see home owners in CFA areas pay on average $142 a year, down from $262, while householders in MFB zones will pay on average $143, down from $193.

Previously the fire services were funded by a tax on home and property insurance, which meant people who were not insured were not contributing to the MFB and CFA. Now all home owners will pay a base $100 charge, other properties will pay $200, plus an additional charge based on the capital improved value of the property.

For example, residential properties in CFA areas will pay 11.5¢ for every $1000 worth of capital improved value. Local councils who determine the value will collect the levy.

”This is what tax reform is all about,” Mr O’Brien said. ”When you can broaden the base and make sure people who haven’t been paying their fair share pay, you can lower the rate for those who have been doing the right thing, and that’s what this tax reform is all about.”
The government, as recommended by the royal commission, will also give $21 million worth of concessions to pensioners and veterans, with a $50 discount.

In bushfire prone areas such as Warburton, the move was welcomed with website publisher Paul Jackson calling it a fairer system.

He said after the Black Saturday fires many residents increased their level of insurance to make sure they were adequately covered. ”I know a lot of people do it tough,” he said. ”I would not be surprised, given the mix of people in Warburton, that there are people without building insurance.”

The changes, which come into effect on July 1, have angered commercial property groups and Ratepayers Victoria over how the levy is applied differently, with one shopping centre’s contribution jumping from $200,000 to $535,000.

Ratepayers Victoria president Jack Davis said the levy should be a flat rate across the state for everyone. ”It doesn’t matter if it is a three-bedroom or four-bedroom or five-bedroom house. A fire is a fire. This is not about replacing the house, it’s about putting out the fire,” Mr Davis said.

The Shopping Centre Council of Australia and the Property Council are frustrated that high-value, low-fire-risk commercial properties will be paying exorbitant rates and that high-valued properties were ”being gouged”.

“These reforms represent an unjustified tax increase on commercial and retail property and offer no identifiable improvements in local emergency services or reductions in fire risk,” Property Council executive director Jennifer Cunich said.

The government will continue to provide 22.5 per cent of the CFA’s budget and 12.5 per cent of the MFB’s budget from government revenue outside the levy.

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