Why did this change?
Under the old insurance-based system, everyone received assistance from the State’s fire services, but not everyone contributed to funding the services.
The Victorian Bushfires Royal Commission found that this insurance-based levy was unfair and lacked transparency, and it recommended replacing this insurance-based levy with a property-based levy.
Problems with the old insurance-based fire levy:
- people who were uninsured did not contribute at all;
- the underinsured were only partially contributing;
- people who were fully insured paid more than their fair share;
- how insurance companies recovered costs from policy holders was at their discretion, which meant that people with similar properties were often charged different amounts depending on their policies;
- not all insurers listed the levy on insurance policies, so some people may not have been aware how much they were contributing;
- GST and stamp duty were charged on top of the levy, which added additional costs discouraging some owners from insuring or fully insuring; and
- there were no concessions for vulnerable Victorians.