THE funding system for the state's fire services should be overhauled and the fire services levy on insurance premiums scrapped, a state parliamentary committee has been told.
The levy should be replaced by new levies on building values and car registration costs, according to a Victorian Farmers Federation (VFF) submission.
It says the proposed charge on building values, payable by the owners, would operate in a similar manner to municipal property rates.
The VFF says motorists should pay a levy on registration costs - of about $20 per registration - to contribute directly to Country Fire Authority and Metropolitan Fire Brigade funding.
"Motor vehicle accidents are a significant contributor to CFA activity, comprising anywhere from 15 to 22 per cent of the annual call-outs," the submission to a parliamentary committee investigating taxation and debt says.
"There are 3.8 million cars on Victorian roads and a small additional charge on registration will provide the means to recover the costs associated with vehicle accidents."
To ensure fairness in the assessments of properties, the VFF calls for a special risk of fire component to be included in the charge, to recognise that different regions and different buildings are at different risks of fires.
VFF president Andrew Broad said yesterday that the levy was a "massive hit on regional Victoria", as it doubled the cost of insurance for farmers and acted as a major disincentive to insure fully, or insure at all.
The VFF's submission comes as critics of the levy - based on house or business insurance - say it can add thousands of dollars to premiums. On top of the levy people pay a 10 per cent GST, followed by 10 per cent stamp duty.
Last month the Municipal Association of Victoria passed a resolution calling for the fire services levy to be dumped.
On the same day, Victorian Treasurer John Lenders announced a funding review and released a green paper for discussion. It contains seven funding options for fire services, including maintaining the current system, the Government's preferred option.
The green paper says the present system is efficient and equitable and provides a stable source of funding. But it also acknowledges an "inequity in the system, where non-insured property owners do not contribute to the fire services".
A State Government spokesman said: "All Victorians have been invited to have their say about the fire services levy."
Sign up for our newsletter to stay up to date.