VICTORIA's fire services levy on insurance should be dumped and replaced by a property-based tax, according to lawyers assisting the Bushfires Royal Commission.
In their submission, the five lawyers argued a property-based tax, such as exists in Western Australia and South Australia, was fairer and more transparent than the FSL.
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The FSL currently doubles the cost of insurance for country Victorian businesses, including farmers, who pay a fire services levy of 72 per cent on their property insurance, plus 10 per cent GST and stamp duty on the combined amount.
The lawyers assisting the commission said there was "no plausible rationale for the retention of the current model on fairness grounds", given the under and uninsured do not contribute their fair share to funding the fire services, via the levy.
In its own submission, the Victorian Government said the commission should not make any recommendations on the FSL.
However, Victorian opposition treasury spokesman Kim Wells said the FSL, which funded fire services including the Country Fire Authority, was grossly unfair because it encouraged people to under-insure or to not insure at all.
But Mr Wells gave no detail on what alternative the Opposition would implement, simply saying the Coalition in government would implement "a fairer system than the one that currently stands".
Victorian Farmers Federation president Andrew Broad welcomed the lawyers' comments and said farmers were now looking to the Government to take the appropriate steps.
"It is clear that the fire service levy has to be scrapped," Mr Broad said.
"The State Government must fast track the review currently underway and commit to abolishing this method of funding before the next fire season. There is no reason for this review to be drawn out into 2011.
"On behalf of Victorian farmers, I am asking John Brumby to show leadership and commit to a new funding system before the 2010-11 bushfire season."
The Municipal Association of Victoria backed the commission's lawyers, but argued its members wanted no part in collecting a new property-based tax or levy, arguing that role should fall to the State Revenue Office.
