Liability Insurance Australia :: News

Share this news item!

Study Bolsters Call to Eliminate Insurance Taxes

⚠️The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Recent research from Victoria University has provided new insights supporting the proposal to abolish insurance taxes in Australia.

The study, conducted by Jason Nassios and James Giesecke, examined the effects of varying rates on four primary taxes: personal income tax, goods and services tax (GST), stamp duties, and insurance duties.

Unlike previous studies, this research assessed the economic impacts of these taxes as their rates fluctuated, rather than analyzing them at static levels.

The findings reveal that stamp duties and insurance taxes are particularly detrimental to the economy, even when applied at minimal rates. The researchers concluded that these taxes are fundamentally inefficient and should be completely removed, a sentiment they shared in their article in The Conversation. Insurance duties, which currently contribute approximately 0.3% of Australia’s GDP, generate about 38.5 cents of economic loss for every dollar raised. When these duties were reduced to generate just 0.01% of GDP, the economic loss only slightly declined to 31 cents per dollar raised.

In comparison, the study found that personal income tax and GST displayed greater economic efficiency and continued to perform better relative to their share of GDP increases. The researchers argue that taxes such as stamp duty and insurance duty are inefficient at any level due to their narrow bases and behavioural distortion effects. Specifically, they discourage individuals from obtaining insurance, thereby rendering these taxes ineffective as revenue-generating mechanisms, even on a modest scale.

This research holds significant implications for Australian taxpayers, businesses, and policymakers. The inefficiency of stamp duties and insurance taxes highlights the potential for economic improvement through tax reform. Eliminating these taxes could lead to increased insurance uptake and reduced economic distortion, enhancing overall economic productivity. Such changes could benefit consumers through potentially lower insurance costs and spur economic activity by removing barriers to efficient resource allocation.

These findings are timely as the federal government's economic roundtable approaches, scheduled to take place in Canberra from August 19-21. Tax reform and budget sustainability will be key topics of discussion. The insights from the Victoria University study could influence policymakers as they consider strategies to enhance Australia’s tax system. By focusing on eliminating inefficient taxes, there is an opportunity to create a more equitable and effective tax framework that supports economic growth.

Published:Thursday, 7th Aug 2025
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Australian Insurtech Startups: Pioneering the Future of Insurance

09 Dec 2025: Paige Estritori

The Australian insurtech sector is experiencing significant growth, with startups introducing innovative solutions that enhance efficiency, security, and customer engagement within the insurance industry. A recent report titled 'Insurtech Down Under: Trends, Tech and Triumphs' highlights the pivotal role these companies play in reshaping the market. - read more

Australian Insurers Address Surge in Mental Health Claims

09 Dec 2025: Paige Estritori

The Australian insurance industry is facing unprecedented challenges due to a significant rise in mental health-related claims. The Council of Australian Life Insurers reports that mental health has become the leading cause of total and permanent disability claims, accounting for nearly one in three payouts. - read more

Calls for Overhaul in Australian Insurance Claims Handling Processes

09 Dec 2025: Paige Estritori

Australian consumer advocacy groups are intensifying their calls for substantial reforms in the insurance industry's claims handling processes. The Australian Consumers Insurance Lobby (ACIL) has criticised the current system, highlighting ongoing issues that compromise consumer outcomes. - read more

WFI Insurance Rewards Sustainable Farming with Premium Discounts

08 Dec 2025: Paige Estritori

In a significant move towards promoting sustainable agriculture, WFI Insurance has announced a new initiative offering premium discounts to farmers who obtain AgCarE certification. This program, developed by AgForce, aims to recognise and reward farmers implementing eco-friendly practices on their properties. - read more

IAG and Ag Guard Forge Partnership to Elevate Crop Insurance for Australian Farmers

08 Dec 2025: Paige Estritori

In a significant development for Australia's agricultural sector, Insurance Australia Group (IAG) has announced a strategic partnership with Ag Guard, a specialist rural underwriting agency. This collaboration will see Ag Guard managing the underwriting for IAG-owned CGU and WFI's crop insurance portfolios starting June next year. - read more

Click for more Insurance News

Business Insurance Articles

Understanding Liability Insurance: A Must-Read for Australian Business Owners

As a business owner in Australia, navigating the complexities of insurance is crucial to safeguard your enterprise against unforeseen events. Liability insurance emerges as a cornerstone of a sound risk management plan, protecting you financially when held responsible for accidents, injuries or negligence. Its importance cannot be understated, as it serves not only to defend your business assets but also to ensure peace of mind in a climate of continually evolving liabilities. - read more

Key Benefits of Comparing Public Liability Insurance Rates for Australian Businesses

As an Australian business owner, you face numerous financial risks daily. Accidents can happen at any time, whether it's a slip and fall on your premises or damage caused by your products or services. These incidents can lead to costly legal actions that may put significant strain on your business finances. - read more

Insurance Essentials: Protecting Your Small Business with Public Liability Coverage

Running a small business in Australia comes with its own set of challenges and risks. One crucial aspect that should never be overlooked is insurance, particularly public liability insurance. The reason is simple: it offers essential protection against claims of property damage or personal injury caused by your business operations. - read more

Q&A: Common Questions Australian Business Owners Have About Public Liability Insurance

Public liability insurance is a crucial aspect of managing risk for businesses in Australia. This type of insurance covers costs associated with claims made against a business for property damage or personal injury caused during business operations. - read more

The Cost of Safety: How Much Public Liability Insurance Does Your Australian Business Need?

As a business operating in Australia, understanding the ins and outs of public liability insurance is not just recommended, it's essential. This type of insurance serves as a safeguard, protecting your business against the financial repercussions of lawsuits and claims arising from third-party injuries or property damage due to your business operations. In a world where one unintended mishap can lead to costly legal battles, public liability insurance stands as your first line of defense. - read more

Start Here !

Knowledgebase

Subrogation:
An insurance carrier may reserve the "right of subrogation" in the event of a loss. This means that the company may choose to take action to recover the amount of a claim paid to a covered insured if the loss was caused by a third party.

This website is owned and operated by Clark Family Pty Ltd (as Trustee for the Clark Family Trust) 43 Larch Street Tallebudgera QLD 4228, A.C.N. 010281008, authorised Financial Services Representative of Unique Group Broker Services Pty Ltd, Australian Financial Services License 509434. Visit the ASIC website for additional licensing information.

IMPORTANT: We are neither authorised nor licensed to provide finance or financial products and we do not offer any form of credit or other financial advice. All product enquiries and requests for financial and/or other advice on this website are referred to third party intermediaries, insurers and lenders - with whom you can then deal directly. We may receive a fee or commission from these third parties in consideration for the referral. Before any action is taken to obtain a product or service referred to by this website, advice should be obtained (from either the third party to whom we refer you or from another qualified intermediary) as to the appropriateness of obtaining those products having regard to your objectives, financial situation and needs. Whilst we have our own process for vaidating the legitimacy of our referral partners, you should always verify the credentials of your financial adviser before proceeding with recommendations that they may present. Visit the ASIC website for further information.