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Fire services levy sparks debate

Posted on November 4, 2011

By BEN PISCIONERI

MILDURA land owners could face rate hikes of more than 20 percent if plans for a new property-based fire levy go ahead, according to the Municipal Association of Victoria.

But the rate hike blow would be softened by significantly lower insurance premiums according to the Victorian Government.

At present Victoria’s fire services, both metropolitan and country, are largely funded by the insurance industry, through insurance premiums.

In the Country Fire Authority’s case, more than 77 percent of funding is derived from the insurance industry.

However, the Black Saturday bushfires in 2009 triggered a call by the Victorian Bushfires Royal Commission to scrap the insurance-based fire services levy in favour of a property-based system.

It was argued that not all home owners insured their properties, but were still serviced by Victoria’s fire services.

It effectively meant people who took out insurance were covering the cost of fire services for those who did not contribute.

The Victorian Government has described the existing system as “inequitable” and lacking transparency.

It’s argued that under a property-based system the cost of funding Victoria’s fire services would be spread more evenly.

One of the proposals is to incorporate the levee in Council rates, which would be collected by Local Government Councils.

Member for Mildura Peter Crisp says while such a plan may lead to an increase in Council rates, it should mean a reduction in insurance premiums and less impact on individuals, given the cost of the fire services levee would be spread across more people.

Under the Victorian Government’s proposal there would also be concessions for low-income earners.

Municipal Association of Victoria president Councillor Bill McArthur, has slammed the proposal, claiming the State’s fire services should be funded from consolidated revenue.

Cr McArthur said basing a fire services levee on land rates could be just as “inequitable” as the existing system.

“In general, properties with low land values situated in high risk areas are likely to have a reduced contribution, while properties with high land value in low risk areas are likely to have their contribution increased,” he said.

Cr McArthur said if a property-based fire levy was collected through rates using a capital improved valuation base the average rate increase would be 19 percent, and more than 30 percent in some municipalities.

He said that aside from the rate hikes, collecting another levy would be yet another burden on Councils.

“Councils have overwhelmingly voiced their strong opposition to being a collection agency for the State,” Cr McArthur said.

Mildura Rural City Councillor Fiona Hilton-Wood, who is on Council’s Municipal Management Planning Committee, this week described the proposed levy as “another way the State Government is giving Council another rate collection role by stealth.”

Cr Hilton-Wood said she understood the reasoning behind the move to a property-based fire services levy, but questioned how it would operate.

“The query that I would raise is that our lands are valued higher and we face a lesser risk of fire danger than some other areas, particularly in relation to our CBD and surrounding area, so how will that be taken into account?” she said.

“They’re (the Government) saying this is all being done for a fairer and more equitable system to fund fire services in Victoria – well we’re all up for fair and we’re all up for equitable, but there are certainly some questions that need to be answered and we’re hoping they’ll be addressed at the upcoming public meeting on November 18.

Sunraysia residents will have an opportunity to seek more information about the move to a property-based levy at a public consultation meeting at Mildura’s Alfred Deakin Centre on November 18.

To have your say on whether the fire services levy should move to a property-based system, visit www.milduraweekly.com.au and look for the poll on the front page.

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