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Fears that revenue raising drives FESA funds vehicle

THERE are concerns the State Government’s new Fire and Emergency Services Authority (FESA) levy funding proposal will evolve into little more than a new revenue-raising vehicle.

Property Council executive director Joe Lenzo said that, although the new funding arrangements created a more equitable system, there were still some serious concerns.

“The FESA levy is [currently] levied on insurance premiums, so people who self-insure or don’t insure their building don’t pay the levy,” he said.

“The new net is broader and catches more people, which I think is fair.

“Our proposal to government is, if the net is larger, then you can reduce the levy.”

The catch, according to Mr Lenzo, is that the levy is now controlled by the government and there are concerns that it will prove a valuable revenue-raising vehicle, similar to the car park levy in the city, which has more than doubled since 1998.

It’s not just the Government that is causing commercial property owners a headache in relation to FESA funding; the insurance companies also play an important part.

Under the new program the Government has claimed commercial property owners will pay up to 33 per cent less in insurance premiums.

“It will work provided they [the Government] meet the requirement, which is that insurance companies pass on the savings to property owners,” Mr Lenzo said.

“That has to be a transparent process.

“The Government told us they would audit the insurance companies. What we don’t want is for this to be used as an underhand way to raise revenue.”

The Government has assured the Property Council that the levy will be used to raise funds based on the FESA budget and that it won’t be used to raise revenue.

Minister for Police and Emergency Services Michelle Roberts said the new funding arrangement was a fairer and more equitable system that would provide greater support for the State’s emergency services volunteers.

“This means that people who responsibly insure their property are currently heavily subsidising those who avoid contributing, either by not paying or by insuring offshore,” Ms Roberts said.

“This translates to an average reduction of $80 for most fully insured residential property owners.”

The Real Estate Institute of Western Australia (REIWA) was also critical of the Government’s approach to dev-eloping the new funding.

REIWA president Graham Joyce said he was made aware of the new funding arrangements for FESA through a news bulletin.

“We weren’t consulted about the funding for FESA and we work within the property industry,” he said.

Mr Joyce was, however, slightly more optimistic about the Government’s business tax reform proposals.

“They’re really just tinkering at the edges but for the first time we are seeing the State Government head in the right direction,” he said.

“It is a sting for property developers though, which will make the delivery of land more expensive.

“The plan to reduce the number of land tax threshholds will also slow down the rate of growth in land tax, but some property owners may end up paying more land tax as a result.”

The Property Council said the business tax reform proposals offered some limited tax relief.

“However the reforms will not compensate the property industry for the $57 million plundered from stamp duty increases in the last Gallop budget,” Mr Lenzo said.

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