Analysis  shows South Australian farmers face the highest stamp duty on insurance premiums — 11 per cent. In Victoria the Government offers an exemption from the 10 per cent stamp duty rate, on hail insurance policies for cereal crops. But no exemption is applied for those taking out insurance for other perils such as drought or flood under a multi-peril crop insurance policy. And to further complicate things in Victoria, there is no stamp duty relief for farmers insuring their high-value canola or legume crops against hail. In Western Australia a 10 per cent stamp duty is levied on multi-peril crop insurance and regular crop insurance. In NSW the applicable stamp duty rate on MPCI policies, and all other insurance including hail, is the lowest in the nation at 2.5 per cent. In addition, stamp duty in all states is applied after GST, in accordance with the agreement reached by states and the Federal government before the introduction of the GST in 2000, which means growers are paying stamp duty on the GST amount. A recent Independent Pricing and Regulatory Tribunal multi-peril crop insurance review for the NSW government found MPCI providers estimated policies could cost farms $25,000 to $50,000 a year. Based on a $50,000 premium the difference between the stamp duty paid on a $50,000 MPCI policy premium in South Australia compared to NSW would be about $5000. The NSW Primary Industries Minister Niall Blair, who according to sources, is planning to offer MPCI premium subsidies following the recent review, was tight-lipped on stamp duty relief and a spokeswoman said they were still considering the tribunal’s final report. In South Australia, which has the highest rate of stamp duty, Grain Producers of South Australia chief executive Darren Arney said they were lobbying for a stamp duty exemption on MPCI products as “a way of mitigating against droughts and floods”. South Australian state opposition agriculture spokesman David Ridgway said they planned to abolish the duty on multi-peril policies if the Liberal Party was elected in 2018. “Farmers take the burden off taxpayers in a drought (with multi-peril policies). It seems a bit of a no brainer to exempt stamp duty,” he said. He said last year in NSW growers paid three and a half times more in MPCI premiums than South Australian growers, but the farmers in his state paid more than the NSW farmers in stamp duty on those polices. A spokesman for South Australian Treasurer Tom Koutsantonis said very few farmers had taken up MPCI because the premiums were very high “and the benefit of the Liberal proposal to farmers who do take out the insurance would be minimal”. Mr Koutsantonis said his Labor Government had introduced other measures including abolishing stamp duty on plant and equipment and introduced a stamp duty exemption for farms transferred between family members. In Western Australia, which has been hard hit by frost damage this season, WA Farmers Federation president Tony York said they were lobbying hard to get a stamp duty exemption on MPCI products. “We are actively working to try and encourage the Government to look at it as a form of risk management,” Mr York said. A spokeswoman for West Australian Treasurer Mike Nahan said their MPCI policy was “to provide information and analysis to assist farm business decision making and risk management ... rather than provide direct financial assistance to support the ­uptake of insurance.” Director of multi-peril provider SureSeason Australia, Darryl McCrae, called for consistency across the states to ensure the products, which were still in their infancy, had the chance to mature. “For multi-peril (insurance) to be a success in Australia there is risk to the insurers, and we have to have geographical spread,” he said. Victorian Farmers Federation president David Jochinke said the fact stamp duty still existed was a problem. “When GST came in we thought stamp duty would be a thing of the past along with payroll tax,” he said. The intergovernmental agreement struck with all states and territories prior to the introduction of the GST in 2000, agreed states would eliminate “a number of existing inefficient taxes which are impeding economic activity” and “review the need for retention” of stamp duties in exchange for GST revenue. Source - http://www.weeklytimesnow.com.au