A ‘NATURAL disaster tax’ which is prohibiting Queensland farmers from taking out crop insurance should be abolished ahead of the upcoming storm season
Queensland Farmers’ Federation has renewed their calls to remove stamp duty on agricultural insurance after the South Australian Government passed legislation to remove stamp duty on multi-peril crop insurance policies.
They are the third state to have abolished the tax to make insurance more attractive to farmers, following moves from Victoria and New South Wales.
QFF President Stuart Armitage dubbed the stamp duty a ‘natural disaster tax’ and called for the State Government to follow suit.
Both Labor and the LNP pledged to review the issue of stamp duty in the lead up to the 2017 state election.
“The Victorian, New South Wales and the South Australian governments have removed this inefficient tax, while our government continues to collect nine per cent on the insurance premium and the GST,” Mr Armitage said.
“With Queensland the most disaster impacted state in Australia and climate projections suggesting more frequent extreme weather events, farmers are looking to better understand, develop and adopt risk management strategies to manage uncertainty, spread risk and maintain business viability.
“Practical and affordable insurance options could help mitigate the financial impact of extreme weather events on farm businesses and remove some of the burden that falls to government.”
Mr Armitage said the State Government had requested that QFF provide the costings of abolishing the tax, which he said were minimal.
“Due to the limited availability and uptake of crop insurance in Queensland, the loss in tax revenue is minimal, but the potential returns of developing the nascent insurance market in Queensland could be substantial.”
Mr Armitage said it was estimated that the State Government would lose between $3 million to $4 million in revenue if the tax was abolished, but said the gains far outweighed that.
“Insurers are saying that are going to NSW or Victoria instead as it is easier to sell their product if it’s 10 per cent cheaper.”
Agriculture Minister Mark Furner today said that they had honoured their election commitment to review the stamp duty and a said feasibility report would be available early next year.
“The Palaszczuk Government made an election commitment to investigate the feasibility of abolishing stamp duty on agricultural insurance products, and we have delivered on that commitment,” Mr Furner said.
“KPMG has been engaged to provide a report in early 2019.
“As part of its work KPMG is conducting economic modelling and consultation with key industry and government stakeholders.”
