The Victorian government's Fire Services Levy was introduced on July 1. It replaces the original levy, which was deducted from insurance premiums, and now collects funds from all property holders along with council rates.
The original levy was introduced in 2009 to pay for implementing the recommendations of the 2009 Bushfires Royal Commission.
One of the recommendations of the Bushfires Royal Commission was to employ an extra 342 firefighters for the Country Fire Authority (CFA). The Victorian Coalition government under former premier Ted Baillieu and now Premier Denis Napthine has refused to do this.
Local councils began collecting the levy on July 1 along with council rates. Most Victorians assume the levy will improve firefighting services.
But an independent economist's report, commissioned by the United Firefighters Union, found that under both schemes, the state government funded only 22.5% of the CFA budget and 12.5% of the Metropolitan Fire Brigade (MFB) budget.
The union said the law is unclear about the government’s commitment to contribute to fire services after 2013-14. The government would be able to cut its contribution and raise the levy paid by ratepayers.
Moreland City Council voted on July 10 to write to the state government to call for the levy to be spent on fire protection.
The council would also call on the Napthine government to restore the CFA and MFB budgets, implement without delay the recommendations of the royal commission, and guarantee that it would not cut its contribution to the fire services and replace that contribution with a raised fire services levy.
The motion was moved by Socialist Alliance councillor Sue Bolton. Bolton told Green Left Weekly the state government had misled Victorians.
“All the signs are that the state government is going to withdraw from contributing to the provision of fire services and instead shift the cost of fire protection onto all Victorians through the fires services levy,” she said.
“The fire services levy is an inequitable way of funding fire services, in the same way that council rates are an inequitable way of funding local government services. Ordinary homeowners are subsidising the cost of fire protection for people with very high asset values because of a change in the formula for the fire services levy.
“This is because the formula has been changed from being based on the value of the property insured to a flat tax with a small variable portion representing the value of the property.
“As well as being inequitable, the fire services levy isn’t being spent in its entirety on fire protection. The firefighters union report shows that the Metropolitan Fire Brigade and the Country Fire Authority have banked $157 million in 2011-2012 and not spent that money on fire services.”
Only one councillor, Liberal Rob Thompson, voted against the motion.