Stop taxing life

Jim Minto

The chief executive of insurer TowerAustralia, Jim Minto, has called on the Government to ensure that life insurance is included in the proposed review of Australia’s taxation system.

Commenting on the contents of the Federal Budget, Minto said that, at present, income protection life premiums could be deducted in a taxpayer’s personal tax return but other forms of life insurance could not.

“This is an odd situation as life insurance premiums can be deducted from superannuation funds, making that more tax effective for Australians,” he said. “While this benefit to pay insurance from superannuation is an important benefit, it is not in the interests of all taxpayers to use their superannuation to pay life insurance.”

Minto said that making life insurance deductible outside of superannuation would see more superannuation savings preserved for the future and life insurance being treated consistently from a tax perspective inside and outside of superannuation.

He said the Australian life insurance industry delivered large community benefits and the industry presently paid out more than $4 billion a year in claims.

“This takes welfare costs off governments and their budgets and as an industry provides benefits to the whole community,” Minto said.

He said the Queensland Government’s decision to remove stamp duty from life insurance policies was a step in the right direction and should be considered as part of the overall national review.