The Financial Services Council (FSC) has warned that it is inappropriate for State Governments to be seeking to reap stamp duties from insurance within superannuation.
In a further submission to the Tax White Paper process, the FSC has pointed to the degree to which State stamp duties have been acting as an impediment to addressing Australia’s broader under-insurance problem.
In doing so, the FSC has also called on the Commonwealth to renegotiate the Goods and Services Tax (GST) with the States in a bid to eliminate unnecessary state taxation.
However in dealing with the question of State stamp duties on insurance, the FSC submission said the organisation believed that it was “inappropriate for State and Territory governments to impose stamp duty on life insurance or disability insurance within Australia’s compulsory contribution superannuation system”.
The submission said this was because the cost was ultimately funded from the members’ superannuation accounts.
The FSC said it was recognised by government policy, world-wide, that concessional tax and stamp duty treatment should be afforded to policy owners who provided for themselves and their families by securing long term capital benefits by way of life insurance policies.
“We advocate that the concessional stamp duty treatment afforded to premiums for life insurance death benefits should also be afforded to premiums for total and permanent disablement insurance, trauma insurance and disability income insurance, issued by life insurance companies, for exactly the same reasons,” the submission said.
