Newman Government Lifts Insurance Costs From Today

Media Release.

Today (Thursday 1 August) is the day Queenslanders start paying more for their vehicle and household insurance cover thanks to the Newman Government.

Shadow Treasurer Curtis Pitt said from today Queenslanders would face increases in insurance duty on their motor vehicles and homes.

“The increase will even apply to householders in disaster-prone areas who have already seen their premiums rise dramatically,” Mr Pitt said.

“The 2013 State Budget delivered in June outlined increases in insurance taxes that will generate an extra $990 million for the Newman Government over four years."

“This was after the Treasurer previously said that there would be no tax increases in the Budget."

“This increase is particular unfair because GST is already charged on insurance, so the Newman Government is imposing a tax increase on top of an existing tax which only compounds the cost to householders."

“When he was on the Opposition benches the Treasurer Tim Nicholls called insurance duty a ‘windfall on misery’. Now in Government he is using it as a windfall for himself.”

The table below shows what the LNP’s insurance duty slog will mean for the cost of living.

Insurance Category	Percentage increase	Average dollar increase
Car Insurance	4%	$36
Home and Contents Insurance	1.5%	$25
Mortgage Insurance	4%	$14

The increase in duty for an average household with mortgage insurance and two cars is more than $110 per year.

Mr Pitt said in disaster affected areas some increases would range between $123 and $215 a year even though many residents were already struggling with insurance costs.  

“The increase for people in disaster affected areas is even greater where some premiums have increased by 1000 per cent over the last two years."

“Some households in flood-affected areas are paying insurance premiums of anywhere between $8,200 and $19,000 a year,” Mr Pitt said.

He said the increases from 1 August followed an admission by the Under-Treasurer in Parliamentary Estimates hearings that no assessment had been done on how the duty increase would impact on people in disaster affected areas including the uptake of insurance.

Extract from Estimates Committee Hearing:

Mr PITT: Under Treasurer, with reference to page 57 of budget paper No. 4 where sets out increases to insurance duty—the Treasurer previously described it as a `windfall on misery’; I think that was one of the things said in this particular area—was any advice requested on potential impacts on the uptake of insurance in disaster affected areas and, if not, why not?

(Under-Treasurer) Ms Gluer: I do not actually believe that did form part of the assessment when it was done, and the main reason for that, Mr Pitt, is that the actual increase in insurance duty is such a small part of the actual premium and the actual premium increase in the areas that I think you are referring to was very significant compared to the stamp duty portion of that.