Proposed net cash flow tax to raise Aussies’ insurance costs: industry body

The council suggested scrapping stamp duties on insurance, amongst others.

A proposed net cash flow tax (NCFT) in Australia could increase costs for insurance customers, a local industry council warned.

The NCFT would be “unworkable” for insurers, whose profits rise and fall with disaster cycles, according to the Insurance Council of Australia in a statement on 15 September 2025.

“When major floods, fires or storms hit, insurers pay out massive claims and profits drop and in quieter years they rebuild their reserves to pay future claims,” the council said.

The statement comes after the government’s productivity commission made five recommendations to boost economic efficiency, one of which is the proposed new tax.

Instead of the tax, the insurance council said that state governments should “fix the broader problems in Australia’s tax system.” Its suggestions include scrapping stamp duties on insurance and the New South Wales’ Emergency Services Levy, which can add up to 30$ to insurance costs on top of GST, it said.

Its other suggestions include reducing the overall corporate tax rate for all businesses, and removing what it calls “inefficient” insurance taxes.

The council also suggested creating a national database of climate risks with home resiliency ratings, and a $30.15b fund to strengthen flood defences.