Call to abolish Qld stamp duty on insurance premiums

Every Queenslander would save $265 a year if the state scrapped a stealth tax that reaps billions, one peak body has revealed.

Treasurer Cameron Dick on Wednesday. Picture: Lyndon Mechielsen

Every Queenslander would save $265 a year if the state stopped siphoning tax from insurance premiums, the sector’s peak body has revealed.

As it stands taxpayers are funnelling a whopping $1.7bn into Queensland coffers in the 2024-25 financial year from stamp duty slapped on insurance policies, up from $1bn in 2019-20.

The Insurance Council of Australia, in its election platform ahead of the October poll, said abolishing the tax — which adds 9 per cent to the cost of every insurance policy — would be the most effective and immediate way to bring down premiums.

And if the next state government chose not to get rid of stamp duty on insurance policies, it should pledge to funnel the takings into fortifying Queensland against disasters, the council said.

Treasurer Cameron Dick ruled out removing stamp duty on insurance as recently as last week, saying Labor’s fiscal position was “very clear, very plain” and outlined in the budget.

The LNP has pledged to abolish stamp duty for first-home buyers but has not yet weighed in on insurance premiums.

Abolishing stamp duty on insurance premiums has long been advocated by those in the sector, including the RACQ earlier this month.

Queensland is Australia’s most disaster-prone state, with $4.5bn in insurance claims maid since 2021— $1.7bn of that in 2023 from Cyclone Jasper in the Far North and the freak Christmas storms on the Gold Coast hinterland.

Insurance Council of Australia COO Kylie Macfarlane

Insurance Council of Australia chief operating officer Kylie Macfarlane said it was madness that state governments tax homeowners and renters for taking out policies to protect themselves at a time insurance was needed more than ever.

“The most immediate way to reduce insurance premiums in Queensland would be the abolition of the 9 per cent stamp duty charged on insurance premiums,” she said.

“If the next Queensland government does not abolish stamp duty on insurance, it should commit to investing the revenue collected by this tax in mitigation initiatives that directly benefit Queenslanders and put downward pressure on insurance premiums.”

According to analysis commissioned by the ICA, spending $730m over five years on mitigation could reap $6.3bn in savings through reduced costs of natural disasters to communities and governments.

Fortification efforts spruiked by the council include extending or expanding existing resilience programs with a proven track record, including voluntary buybacks of homes at greatest risk of future flooding through the Resilient Homes Fund.

The council is also calling for a future Queensland government to review land use planning to prevent homes being built in high-risk areas, improving flood mapping, allowing interstate tradies to work in Queensland to help post-disaster clean up efforts, and reducing car thefts to keep premiums down.