The Property Council welcomed the Victorian Coalition Government’s announcement at the weekend that it will release a position paper in June 2011 on the Victorian Fire Services Levy (FSL) and looks forward to seeing the finer details of the Victorian Government initiative.
The Property Council has met with the Victorian Government numerous times on this matter. In late 2010 the Property Council and the Shopping Centre Council of Australia commissioned Geoff Carmody, one of Australia’s leading economists and tax experts, to prepare an analysis of preferred reform principles to replace Victoria’s current FSL. This report was provided to the Victorian Government in early 2011.
Jennifer Cunich, Executive Director of the Property Council in Victoria commented today that, “the Victorian Government has a unique opportunity to design a new tax in this state – a fire services property tax that is broad based, includes property and motor vehicles and reflects good tax design principles of equity, efficiency and simplicity.”
The Property Council welcomed the Victorian Government’s stated aim that the new levy be a “fair contribution” to fire services as an acknowledgement that for too long, the commercial property sector has disproportionately shouldered the burden of the FSL in Victoria.
“We are keen to ensure that commercial property owners do not continue to shoulder a disproportionate burden to fund fire services in Victoria. Commercial property owners have always subsidised the uninsured and underinsured in funding fire services. We look forward to seeing the Victorian Government’s position paper in June and engaging with the Deputy Premier and Treasurer as they undertake this significant programme of reform,” said Ms Cunich.
Ms Cunich called on the Victorian Government to ensure that, “all who benefit from the state's quality fire services (property owners, including principal places of residence, vehicle owners, farmers) should be required to make a fair contribution.”
The Property Council congratulated the Victorian Government on providing certainty to the industry and community through a clear timeline for the implementation of a new model.
“Fire and emergency services are an important general public good as they are primarily designed to protect life, and protecting property is a secondary consideration. The insurance based model for fire services is outdated and does not reflect the reality of the service provided; we are happy for it to be replaced,” said Ms Cunich.
However, Ms Cunich did outline the Property Council’s concerns arising from the recent Victorian State Budget in which the FSL is expected to increase by 15.8%, $88 million.
“This was a surprise and is not consistent with the intended principles for the new property tax: fairness, equity and efficiency. If such price increases take place in the future it will place financial burdens on all property owners (commercial and residential) and will increase the taxation baseline going forward.”
“These are the issues we hope to work through with the Victoria Government following the release of its position paper.”
The Property Council will continue to work closely with the Victorian Government on this important reform initiative.
Jennifer Cunich, Executive Director – (03) 9650 8300
Danni Addison, Public Affairs Manager – (03) 9664 4230 or 0408 861 408