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Legislative Assembly for the ACT: 1998 Week 4 Hansard (25 June) . . Page.. 1087 ..

MR KAINE (continuing):

I have heard Treasurers say that we cannot raise taxes and hypothecate them to specific purposes, because that destroys the flexibility of the Treasury in dealing with the expenditure side of the budget. As I say, we saw the $15 levy imposed on drivers licences. We saw the temporary levy imposed by ACTEW on our water rates bills to cover environmental issues. That was another hidden tax, called a levy. We would not call it a tax, would we? We would call it a levy. Then nobody knows what it really is.

This year, we have another permanent one - the impost on insurance policies. The insurance companies have estimated this, on household contents alone, at something of the order of $100 per year. That is going to be permanently built into the system. The Government is not going to be collecting it. This is not a nasty tax; this is a levy that the insurance companies are going to collect. After it has been there for a while, how many people are really going to know that this is an impost imposed by this Government? The insurance companies will get the blame because they are collecting agencies and all they are going to do is show it on their bill as a levy. If the Government wants to raise $100 from each household in the Territory for emergency services, why does it not impose a tax to do so? It is very simple. It can send out a bill with the rates bill every year. But, no, it is taxation by stealth. We hide the fact that we are actually taxing every household by $100.

The fact is that there are major inequities. That, of course, is another issue. I am sure that the Government will hear a great deal about that over the next few weeks when the debate on this particular issue starts to get a bit of heat in it, because about 30 per cent of householders in this Territory do not have contents insurance on their houses. So, the 70 per cent that do are going to be paying for the 30 per cent that do not. We have seen this with the health funds, have we not? When people notice that they have to pay a $100 a year extra on their insurance policy, what happens? The number that do not take out insurance begins to increase. Pretty soon it is 35 per cent, 40 per cent, 45 per cent, and we have a case of diminishing returns. Fewer and fewer people who still take out insurance on their homes are carrying 100 per cent of the burden. The numbers are reducing. The others are freeloaders.

If the money is truly going to provide additional fire services, if the fire bell rings, the fire stations all respond, they send a couple of fire wagons out to some street in Kambah and if there are four houses side by side, only one of which is paying the insurance policy - the other three are not - are they going to have a look first to see which house is burning down and say, "You are not paying the premium, so we will not fight your fire."? Of course, they are not. So, I think there is an enormous inequity in there, the probability of which seems to have completely escaped this Government, although it has the example of health insurance right before its very eyes. People in their thousands are deserting private health insurance because they are sick and tired of carrying the burden for the ones that do not take out the insurance. The very same thing will happen here, and it is all because we have taxation by stealth. I repeat: If the Government wants to extract $100 a household to cover emergency services, then it should tax the people directly and make sure that it is collected from every householder, not just from the ones who carry the burden of insurance.

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