Automotive Industry Welcomes Fire Services Levy Reform

VICTORIA, AUSTRALIA – Aug 27, 2010: VACC, the peak Automotive Industry body in Victoria, has commended the Victorian Government’s decision to make changes to the Fire Services Levy (FSL).

The State Government has announced it will replace the FSL with a property based system by 2012.

Over many years, VACC has submitted that the escalating cost of the Fire Services Levy was a matter of concern to small business owners in regional and rural areas.

VACC has 5,500 members, 50 per cent of which are small businesses in country areas.

“The Fire Services Levy was a substantial overhead for many small business owners. Small business owners were charged at a higher rate than for residential property owners and those in the country were charged at an even higher rate,” VACC Executive Director, David Purchase, said.

In its recent Fire Services Levy Submission, VACC recommended that the funding structure of the Fire Services Levy lacked transparency and that it would like to see the risk spread more equitably over all households and businesses.

The submission also stated that a ‘property based Fire Services Levy paid by all owners of real property, including vacant land, would result in higher levels of transparency and be more equitable’.

“This change is exactly what VACC recommended. The new system will lift the burden of responsibility off country small businesses. It will also remove the ‘tax on a tax’ which acted as a disincentive for property owners to insure responsibly or take up insurance at all,” Mr Purchase said.

Research by independent researchers, ICA, in 2008 found that out of 1,000 small to medium sized enterprises (SMEs), 26 per cent of SMEs surveyed did not purchase general insurance for their business. Of the 67 per cent which stated they had bought insurance for their business, 5 per cent believed their coverage was inadequate.

“Too many residential and business owners do not invest enough time and money into having the right insurance. While today’s news is good news, it is also a reminder to ensure the policy you have is adequate and appropriate,” Mr Purchase said.