The Victorian Government has introduced a fairer and more equitable system to fund the Metropolitan Fire Brigade (MFB) and the Country Fire Authority (CFA).
Currently Victoria’s fire services are funded by contributions from the State Government, metropolitan councils and a levy collected by insurance companies.
The current insurance-based levy increases the cost of building and contents insurance premiums, and then attracts additional stamp duty and GST on top – a ‘tax on a tax on a tax’, which further increases costs for insured Victorians.
Victorian Bushfires Royal Commission
In 2009, the Victorian Bushfires Royal Commission found the existing levy on insurance was highly flawed, unfair and needed reform. Under the current system those property owners who choose not to insure, under insure or self-insure make no (or inadequate) contribution to our fire services.
The Victorian Bushfires Royal Commission recommended that the State Government replace the insurance-based fire services levy with a property-based levy to ensure that all Victorian property owners contribute their fair share to our fire services.
Property-based levy
From 1 July, the Fire Services Levy will be removed from insurance premiums and replaced by a property-based levy collected by councils through rates notices.
The Levy funds the personnel, training, infrastructure and equipment that are on standby to provide firefighting and rescue services for people and property twenty-four hours a day, seven days a week.
Unlike the current insurance-based levy, the property-based levy will not incur stamp duty or GST.
The Government is providing a $21 million concession program for eligible pensioners and veterans to ensure the most vulnerable in our community are supported.
Removing this ‘tax-on-tax’, and the concession program, will result in savings of around 20 per cent for Victorian households, or around $100 million a year for Victorian households and businesses.
The reformed Fire Services Property Levy, collected with council rates, will incorporate a fixed charge component of $100 for residential properties and $200 for all other properties, plus a charge based on the capital improved value of the property. Farmers with multiple properties that operate as a single enterprise will pay the fixed charge only once.
The State Government will continue to fund 12.5 per cent of the MFB budget and 22.5 per cent of the CFA budget in addition to the levy.
Fire Services Levy Monitor
The Government has established an independent Fire Services Levy Monitor headed by Professor Allan Fels to oversee the transition to the new property-based levy and ensure that insurers genuinely pass on savings to their customers.
The Government is committed to implementing this reform to ensure Victoria's fire services are properly and fairly funded.
More information
For more information visit the Fire Levy website
