Paying a duty on insurance premiums is a pain in the neck for farmers. For years, the Victorian Farmers Federation has complained that farmers should not be lumped with the burden of paying GST on top of these duties when taking out insurance.
Most Australians would agree that paying a tax on a tax is unfair.
So it’s to the credit of the Victorian government that when Treasurer Tim Pallas hands down the state budget next week, it will include a measure to scrap the existing tax on agricultural products for insurance against flood, fire and other accidental provisions.
The move shows that the government has listened to the concerns of its rural constituents, and to the peak body representing the state’s farmers.
With the duty gone, the cost of insurance premiums will be reduced for farmers insuring against damage to crops, livestock and equipment.
Given recent challenges involving drought and floods, farmers are paying an increasing amount of money to insure against the inherent risks of farming.
This is something which has only been made worse by the changing weather patterns.
Rising premiums and tight budgets have led some farmers to under-insure, which is far from an ideal way to manage risk.
The government hopes the reduced tax burden will encourage farmers who don’t have insurance or are under-insured to bite the bullet and take out a package.
From experience, I can tell you it’s worth protecting all your assets.
The measure shows that Spring Street is taking agriculture seriously, recognising that the farm sector is a serious driver for the Victorian economy.
It also shows that farmers are being supported so that they can keep working to feed our state.
By getting rid of insurance duty, farmers will have more affordable options to manage the increasing level of risk that they face each year.
Not only that, but many primary producers who have been doing it tough should be able to have a little more money in their back pockets.
The government’s plan to scrap insurance duty is a win for the agriculture sector and will restore fairness to our insurance policies.
David Jochinke, VFF President
