Victoria’s abolishment of duty on business insurance premiums comes into effect

The Victorian Government’s plan to progressively abolish duty on business insurance premiums has come into force from 1 July 2024.

The Victorian Government’s plan to progressively abolish duty on business insurance premiums has come into force from 1 July 2024. As outlined in last year’s state budget papers of Victoria, the duty will be reduced by the rate of 1% every year over a 10-year period until 2033, when it will be completely abolished.  

Current state of play 

Currently, there is a 10% duty that’s levied on business insurance premiums in Victoria. However, for business insurance contracts that are effected or renewed from 1 July 2024, they will be charged a duty of 9%. That rate of duty will reduce by 1% each financial year to the point that it’s completely abolished for contracts that come into force from 1 July 20233.  

Business insurance is considered to be general insurance that falls under specified classes of business as determined by APRA. These specified classes include: 

• Aviation  

• Cyber (from 1 January 2025) 

• Directors and Officers (D&O) (from 1 January 2025) 

• Employer’s Liability  

• Fire and Industrial Special Risks (ISR) 

• Marine 

• Public and Product Liability 

• Professional Indemnity 

Importance of this abolishment 

The Victorian budget papers underline that over the course of the first three years of the abolishment taking effect, it will end up “saving businesses more than $275 million”.  

The abolishment is also a step toward ensuring that insurance remains accessible and affordable for Australian businesses, especially in times of rising cost of living pressures and the threat of extreme weather.  

The Victorian budget papers also highlight that the abolishment of the business insurance duty over the next decade will likely lead a business to “save around $3200 on professional indemnity insurance or $2400 on fire and other special risk insurance cumulatively over that time.” 

You can read more about the progressive abolishment of business insurance premiums in Victoria here.