STAMP DUTIES (INSURANCE) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 24 November 2010.)

The Hon. I.F. EVANS (Davenport) (15:53): I rise as the opposition's lead speaker on the Stamp Duties (Insurance) Amendment Bill 2010. I suspect I will be the opposition's only speaker. I say that we have no amendments on this bill, the Treasurer will be pleased to know. With the Treasurer's agreement, rather than go into committee, I suggest that, at the end of the second reading debate, we ask some questions at that stage; it will save the house some time. There are only three or four.

Essentially, this bill has three principal components. The government asserts that the provisions in this bill, amending the Stamp Duties Act 1923, will bring our legislation into line with other states so no doubt is cast over whether the commonwealth legislation is effective to prevent GST being charged on stamp duty, inclusive of premiums, and that life insurance only attracts a lesser 1.5 per cent stamp duty premium and the riders that are attached to life insurance attract the stamp duty premium of general insurance.

The third aspect relates to the way in which the stamp duty rate is charged, and I will just quickly walk through those three principles. The government advised that, at the time of the introduction of the goods and services tax—something which the Labor Party opposed, but, of course, the state would be broke without GST. The Treasurer is very grateful that there is a thing called the GST. So, it is another flawed economic policy by the Labor Party, but I digress, Mr Acting Speaker.

At the time of the introduction of the goods and services tax, explicit provisions were inserted into the relevant legislation enabling the GST on general insurance premiums to be calculated on premiums exclusive of stamp duty. As the insurer's duty provisions in our act are drafted differently to interstate provisions, doubt has been recently cast as to whether the legislation is effective in preventing the GST being charged on both stamp duty and the premium.

Without these proposed amendments the stamp duty could be charged, then GST, then stamp duty again, then GST again, etc.—a cascading effect. This is really a tidy up. The new insurance provisions in the bill have been amended to be cohesive with other states—I think that means the same, or similar, or the same intent.

To avoid a cascading of stamp duty and GST, the amendments in this bill will ensure that the legislation is effective in preventing GST being charged on stamp duty. Stamp duty under the stamp duty law will be calculated on GST exclusive of premium amounts, not the other way around, stopping the cascading effect.

Amendments in this bill will see the stamp duty rate for general insurance change from being charged at $11 per $100, or a fraction thereof, of $100 of premiums received to a full proportional rate of 11 per cent of the premium revenue received. The current general stamp duty rate of $11 per $100 has been in effect since June 1998; before that it was 8 per cent of premium revenue raised.

The amendment is to avoid an extra $11 being charged on the fraction parts of the $100. For example, if a premium rate received was $101, then $22 stamp duty is paid currently instead of just over $11 as would be as proposed in this bill. Similarly, the stamp duty rate for life insurance will change from being charged at $1.50 per $100, or a fraction thereof of, of $100 of premium revenue received to 1.5 per cent of premium revenue received.

This will result in a minor revenue loss due to the introduction of these specific refund provisions and the change of the flat percentage rate for general insurance, life insurance and insurance effected outside of South Australia.

The bill also amends the insurance provisions of the act to make it clear that riders attached to life insurance policies are dutiable at the general insurance rate and not at the cheaper life insurance rate. I can only assume that, when the policy was adopted, life insurance should be dutiable at the 1.5 per cent rather than the 11 per cent.

There was a conscious decision by the parliament that it wanted to actively encourage people to take out life insurance because there was a social good in that. It protected families and kept them off the system. If they had properly insured themselves and then had the unfortunate experience of dying, there families would be better protected. It is an interesting policy question.

Australia is just going through a debate about a national insurance scheme, and, if Julia Gillard gets her way, we will have yet another Medicare-style levy on our incomes. At the same time, the state will make no differential under this proposal between disability insurance and general insurance.

If the policy is that life insurance is rated at 1.5 per cent duty because there is a social good, it seems to me that there is a logical extension to that, that is, why not let people take out disability insurance, TPD, etc., at a lower rate of duty, because, surely, if they are properly insured for disability and then they unfortunately suffer a disability through accident they are actually better protected and therefore off the system.

However, that is not the policy that we have before us. I just make the observation that at one end of government we are talking about making disability insurance easier and at the other end of government we are making sure it is harder. It seems that there is a conflict in the debate as to why we are doing this.

Life insurers have traditionally offered other insurance products, known as life riders, which cover such risk as trauma, disability or incapacitating injury, sickness condition or disease. So, you would go to your insurance agent and buy a life insurance policy and then you would attach one of these riders to them.

According to the government, RevenueSA has always been of the view that life riders are properly characterised as general insurance under the act and, therefore, dutiable at the higher general rate of insurance of 11 per cent. RevenueSA advises that has always been the view. Whilst a proportion of the insurance industry has complied with this view, in recent times some sections of the industry have disputed this interpretation and asserted that life riders should be chargeable at the lower life insurance rate of duty of 1½ per cent.

In 2007, objections were lodged, as I understand it, by four insurance companies against assessments of the Commissioner of Taxation. The Supreme Court found in favour of the Commissioner of State Taxation and dismissed all four appeals, finding the general rate of 11 per cent, then $11 per $100, should apply to all life riders. I understand that the insurance companies are currently appealing to the Full Court, or are about to appeal to the Full Court.

The amendment of this bill specifically reiterates that life insurance riders, such as, trauma, disabling or incapacitating injury insurance, are to be treated as general insurance and be charged at the higher rate; that is, the 11 per cent rate, rather than the lower life insurance rate, which has been the state's position for some time.

The impact on revenue would be significant if all of the life rider stamp duty could be charged at the lower rate. We were advised by RevenueSA in our briefing that this amendment, as outlined in the bill, operates to prevent what would be a revenue loss of about $18½ million per annum if the lower rate applied to life riders. The amendments relating to life riders seek to confirm RevenueSA's longstanding interpretation of the act that there is no increase in stamp duty as a result of these particular amendments because they argue that it has always been the case.

We asked some questions of RevenueSA relating to the levels of stamp duty collected, and we did get responses via the then treasurer's office. I will read the questions and answers into the Hansard for completeness of debate. We asked: if the 1½ per cent stamp duty rate, which we understand is charged on only life insurance premiums only, was charged across the board for all insurance, instead of the 11 per cent general stamp duty rate, what would be the estimated loss of revenue? The answer we were given was that the full year budget impact is estimated to be about $260 million in 2011-12, rising to about $300 million in 2013-14. The current general stamp duty rate has been in effect since June 1998, and before that it was 8 per cent.

The next question we asked was: what is the amount of stamp duty collected from life insurance premiums, and the number of premiums written each year for the last three years? We were advised that stamp duty collected from life insurance premiums in the last three years was: in 2007-08, $4.9 million; in 2008-09, $5.1 million; and in 2009-10, $7.8 million. RevenueSA advises that it does not collect data on the number of premiums. The value of life insurance premiums as it relates to the above stamp duty payments would be: in 2007-08, $330 million; in 2008-09, $345 million; and in 2009-10, $520 million.

The next question was about the amount of stamp duty collected from TPD, disability and trauma and the number of premiums written each year for the last three years. The answer we received was that one of the arguments put before the Full Court of the Supreme Court is that TPD, disability and trauma insurance are, in fact, life insurance, whether provided as a rider of or on a stand-alone basis. Insurance companies have largely been seeing stand-alone policies as general insurance; however, one of the appellants disagrees. RevenueSA does not receive information that identifies the type of insurance on which stamp duty is being paid by life insurance companies, so the amount of general insurance duty collected from the life insurers does not only include duty paid on TPD, disability and trauma policies, but also includes income protection insurance issued by life companies.

The amount of stamp duty paid relating to the general insurance by life insurers in the last three years was: 2007-08, $17 million; 2008-09, $17.8 million; and 2009-10, $19.6 million. RevenueSA does not collect data in relation to the number of premiums. The value of general insurance premiums that relates to the above stamp duty amounts would be around: 2007-08, $158 million; 2008-09, $165 million; and 2009-10, $183 million.

The four life insurers who are challenging RevenueSA's view on life writers in the Full Court of the Supreme Court have not been paying duty on life writers at the general rate, and further revenue will be collected from this source from January 2006 onwards if the government is successful in its legal action.

I interpret that to mean you are actually going to go back and charge them four years' worth of stamp duty at the highest rate, if you are going to collect it from this source, since January 2006. So, the government has four years of stamp duty collections. The Treasurer might want to advise, in his response, what the estimated windfall gain to the government is as a result of that.

The last question was: what is the estimated increase in the stamp duty revenue resulting from these amendments? The answer to that is that the amendments relating to life writers seek to confirm RevenueSA's longstanding interpretation act, so there will be no increase in stamp duties as a result.

It was originally estimated, based on the available 2008-09 figures, that if RevenueSA lost the Supreme Court appeals, revenue loss would be around $70 million a year, but they now have new figures and, based on the new figures, the revenue loss would be around $18.5 million a year. The other amendments in the bill will result in a very small revenue loss, so the net effect is around $18.5 million. I thank RevenueSA and the Treasurer for those responses.

As an enthusiastic opposition, we went out and consulted on this particular bill, and we got some interesting responses. We consulted with the National Institute of Accountants, who gave a response to us, which was essentially that they hold the view that federal, state and territory governments should continue efforts to reform state taxes, especially in terms of removing these indirect taxes, such as stamp duty on insurance premiums and business and real property transfers, and to achieve harmonisation of taxes across the states.

The review of the future tax system, the Henry review, confirms the view that state-based stamp duties are inefficient and should be replaced with broad-based efficient taxes. It goes on to say, in relation to stamp duty taxes on insurance premiums in particular, that the National Institute of Accountants' view of stamp duty on insurance premiums is that they should be abolished. Insurance products should be treated like most other services consumed within Australia and be subject to only one broad-based tax on consumption. The Henry review also recommends that all specific taxes on insurance products, including the fire service levy, should be abolished.

I am pleased to say that, in my younger days, I saw this coming and moved to abolish the fire service levy on insurance. This was a radical reform at the time, but the Liberal Party was very pleased to be the forerunner of states abolishing the fire service levy on insurance. We did so for the reasons broadly outlined in the letter from the National Institute of Accountants and the fact that, of course, only the insured were paying the levy, not the uninsured. It was a popular reform and I remember it well. We also—

The Hon. J.J. Snelling: With enthusiasm.

The Hon. I.F. EVANS: With enthusiasm, yes. The National Institute of Accountants loved it and the insurance industry enjoyed it. It started to struggle a bit after that. It is a vague memory I have.

The other people we consulted with were from the Investment and Financial Services Association. They, very generously, sent me a copy of the submission they sent to RevenueSA, so I am sure the minister is right across the submission. He has read it, which is good, because there are some questions in it that I seek the minister to answer.

Essentially, the Investment and Financial Services Association says that this bill should not be debated and passed by the house currently because there is a tax summit under the federal government coming up in May or June (I assume the Treasurer is going), and the Henry tax review and the tax summit are going to deal with the issue of stamp duties on insurance as part of that debate. This particular group argues that we should halt the debate and see what comes out of that tax summit because then we can deal with it on a national basis in a more uniform way. That is put up at the very start.

It also argues that if this bill proceeds, South Australia's taxation of life insurance will be fundamentally different to that of other jurisdictions. I would like the Treasurer to explain how life insurance taxation will be different in South Australia under this bill compared to other states because the Investment and Financial Services Association, which deals with this matter, says that if this bill proceeds we will be:

...fundamentally different to other jurisdictions, and it will add to business complexity and inefficiency. We, therefore, urge the South Australian government to reconsider the introduction of the legislation.

The association argues that the legislation should not be introduced at all. I know that is not a surprise to the Treasurer because he has just indicated that he has read the submission.

In relation to the bill, varying rates of taxation and compliance regimes increase the administrative cost of providing life insurance. The association argues that, under section 32 of this bill, the definition of life insurance specifically excludes life riders such as trauma or TPD insurance and would make them dutiable at the general rate of 11 per cent rather than the life insurance rate.

The assertion by RevenueSA in its Circular No. 213 of 17 April 2001, which is apparently being reiterated by the bill, is that life insurance riders, including TPD and trauma insurance, are to be treated as per general insurance not life insurance from a stamp duty perspective. In this regard, it should be noted that the GST legislation, which raises revenue exclusively for the states, treats all elements of life insurance on a consistent basis without attempting to isolate riders.

The association is saying that because the GST federally is uniform on insurance and life insurance riders at the equal rate, a similar thing should happen at the state level with stamp duty, and it argues it should be rated at the lower level of 1.5 per cent. The Investment and Financial Services Association believes:

The administrative cost of complying with this change may, in fact, exceed the additional revenue collected.

I have asked the Treasurer to confirm that RevenueSA has actually done that calculation. When Western Australia adjusted its life insurance taxation method several years ago, the additional revenue raised statewide was in the order of $30,000 per annum, but the IT and compliance systems changes required to accommodate the change of one of the three biggest life insurers cost in the order of $1 million.

The association raises specific concerns with the drafting of the bill, and I will read them. I do not know whether the minister has been given the submission by this group in the house. If his advisers happen to have the submission here, there are two pages of concerns on the drafting and, just to give the minister forewarning, I will go through each of those concerns one by one. Given that the advisors are indicating that they have the submission—there are two pages of concerns—maybe I will stop now and, with the Treasurer's agreement, we can walk through each of the concerns one by one, and that will be the end of the debate as far as the opposition is concerned, rather than go into committee, because we have no amendments.

The DEPUTY SPEAKER: Certainly, if the Treasurer is willing.

The Hon. I.F. EVANS: I should clarify for the sake of the record that the opposition will not be opposing this measure, unless there is some surprising answer that the Treasury gives us. We recognise that, if we did oppose the bill and knock this measure out, it may put an $18 million to $19 million per annum hole in our budget and we are not prepared to do that on this particular issue. Even though there are industry concerns about this, these figures have been built into the budget for some many years and we are not about to knock them out today. Do we need to go into committee for the adviser?

The Hon. J.J. Snelling: No.

The DEPUTY SPEAKER: Obviously, the member for Davenport is aware of the fact that once the Treasurer speaks he closes that debate.

The Hon. I.F. EVANS: Yes.

The DEPUTY SPEAKER: Are you happy to work within those parameters?

The Hon. I.F. EVANS: I will do it this way: I will read in the concerns and the Treasurer can give me the answers. The specific drafting concerns are these. Commencement: the proposed commencement date is stated to be 'on the day fixed by proclamation'. From an administrative perspective, the relevant association members have indicated that a reasonable implementation period will be required to enable life insurance companies to comply. The association would be pleased to provide more detail with respect to an appropriate transition period.

The second issue is the apportionment of premiums. The association notes the introduction of an apportionment provision by new section 32(2) in the bill. The provision states that if there is a reference in the provisions to:

…a premium paid, payable, received, charged or credited in relation to life insurance, or in relation to insurance of another kind, the reference is to be taken to be a reference to the premium to the extent that—

and 'to the extent that' is bolded—

it was or is paid, payable, received, charged or credited in relation to the insurance of the kind referred to in the provision.

The question raised by the association is that it is unclear how the apportionment of a single premium should be determined practically. The association suggests a ruling should be issued by RevenueSA in consultation with the association in relation to this apportionment issue. The nexus to the State of South Australia: the bill has unclear and differing provisions in relation to what is the required nexus to the State of South Australia. In particular:

the registration provision (new section 33) has an unclear nexus to the State of South Australia;

the lodgement of statement provisions (which are new sections 34 and 35) have no nexus provisions at all; and

there are references to 'effecting' insurance either in or out of South Australia, but no definition or explanation of what that means.

The association suggests that it be made clear that the nexus is, for general insurance—insurance of property, or risks or contingencies that occur in South Australia, and for life insurance—insurance for a person whose principal place of residence is in South Australia (at the time the policy that effected the insurance was issued), and then it provides more detail. In relation to registration, which is new section 33(1), it states, 'An insurer who carries on insurance business in the state' and 'carries on insurance business in the state' is bolded, 'must be registered under this division'.

The association raises the issue that the definition of 'insurance business' refers to the provision of insurance in paragraphs (a) and (b). Therefore, an insurer who provides insurance in the state is required to be registered. Does 'provision' refer to the location of the insurer who is providing the insurance, or does it refer to the insured or the insured's risk? The association suggests an approach similar to that which is used in New South Wales. The relevant nexus for life insurance would be 'of a person whose principal place of residence is, or persons whose principal places of residence are, in South Australia' at the time the policy that effected the insurance is issued.

The relevant nexus for general insurance would be property in South Australia, or a risk, contingency or event concerning an act or omission that, in the normal course of events, may occur within, or partly within, South Australia, or both. The association also raises some issues about lodgement of the statement.

New sections 34(1) and 35(1) simply refer to the payment of duty 'in respect of each premium relating to…insurance paid to the insurer'. The definition of 'premium' does not have any nexus to South Australia. As presently drafted, the bill requires all premiums, whether having the relevant nexus to the State of South Australia or not, to be included in the statement upon which the duty is charged. The association suggests that provisions be amended so that premiums to be included in the relevant statements need to be limited to those premiums having the relevant nexus to the State of South Australia, and they refer to the earlier comments that I have just read.

Other references to nexus: paragraph (d) of the definitions of 'insurance businesses' refers to 'the carrying out, by means of insurance effected out of this state of a contract or undertaking to effect insurance'. No other paragraph of the definition of 'insurance business' contains a nexus provision, that is, effected in this state. There is no definition or meaning given to 'effected out of this state'. New section 38(1) contains additional and differing nexus concepts. It provides:

A company...that obtains, effects or renews, outside the state, a policy of insurance wholly or partly in respect of property in the state, or a risk, contingency or event occurring in the state...

Again, I refer to the earlier comments I made about general insurance in relation to registration.

In regard to exempt insurance, as currently drafted the bill would seem to require the inclusion of premiums that are exempt from the duty in the statement as there appears to be nothing to so exclude them. In regard to refunds, we note that the term 'dutiable premium' is not defined in the bill. They are the issues raised by the Investment and Financial Services Association. If the minister can address those issues for us, we will not need to go into the committee stage.

The Hon. J.J. SNELLING (Playford—Treasurer, Minister for Employment, Training and Further Education) (16:21): I will do my best to answer those questions and, if there are any other issues the member for Davenport would like me to clear up, I would be happy to do so on another occasion. I thank the member for indicating his support for the bill.

With regard to the issues the member has raised, I will go through them one by one. The first issue the IFSA raises is that it does not support the imposition of state duties on life insurance. The IFSA states:

These duties have the effect of discouraging Australians from taking out and continuing their life insurance, which will, in turn, lead to a higher level of underinsurance and a greater reliance on all levels of government for the provisions of welfare-related services.

My response is that these duties have been payable for many years and are an integral part of the revenue base. Only four insurance companies have disputed the stamp duty applying to riders. The rest of the insurance industry has been paying stamp duty on the riders. Legislation would represent absolutely no change for the majority of insurance policies with these riders.

The second issue it raises is that South Australia's taxation of life insurance would be fundamentally different from that of other jurisdictions, adding to business complexity and inefficiency. My response is that this is not the case. While there are some differences between the states in their insurance provisions, in no jurisdiction are riders chargeable on the same basis as life insurance. This bill does not change anything fundamentally compared with what other states are doing with regard to the charging of stamp duty on riders. The third issue raised is that:

Under section 32 (Interpretation) of the bill, the definition of life insurance specifically excludes life insurance riders, such as trauma or TPD insurance, and would make them dutiable at the general rate of 11 per cent rather than the life insurance rate of 1½ per cent. The assertion by RevenueSA, in its Circular No. 213 of 17 April 2001, which is apparently being reiterated by the bill, is that life insurance riders, including TPD and trauma insurance, are to be treated as per general insurance, not life insurance, from a stamp duty perspective. In this regard, it should be noted that the GST legislation, which raises revenue exclusively for the states, treats all elements of life insurance on a consistent basis without attempting to isolate riders. We consider that the same public policy considerations that warrant recognition of term life insurance as entitled to a lesser rate of duty should apply equally to trauma and TPD life policies.

My response is that life insurance has historically attracted a concessional rate of duty. This treatment finds its origin in the United Kingdom upon which Australian stamp duty policy was originally modelled. The principle of applying a lower rate of duty to life insurance was first established in 1902 and all states and territories have followed this practice.

Notwithstanding this longstanding practice, the policy rationale for this concessional treatment is not clearly articulated but seems to rely on arguments that life insurance is a form of investment and/or saving and that life insurance relates to a certain event (that is, death; we are all going to die) and other insurance provides cover against other uncertain events. So, there are other events the riders cover—things of which we cannot be sure and we pray will not happen to us. Riders provide insurance against uncertain events and therefore should be treated in the same manner as other forms of insurance. Next, the IFSA states:

Apart from not being consistent with other jurisdictions, this policy will result in a more onerous compliance arrangement being imposed on issuers of these life insurance riders in South Australia. IFSA believes that the administration cost of complying with this change may in fact exceed the additional revenue collected when Western Australia adjusted their life insurance taxation method several years ago, the additional revenue raised statewide was in the order of $30,000 per annum. The IT and compliance system changes required to accommodate the change at one of the three largest life insurers cost in the order of $1 million.

My response to that is that it should be stressed that this is not a change. RevenueSA has always maintained riders are general insurance and the majority of insurers have been paying duty on riders at the general rate. The revenue comment is untrue as it is estimated that if all riders were chargeable at life rates the loss to revenue would be up to $17 million. So, there would be a risk of loss of revenue of up to $17 million. It should be pointed out that, as I said before, the majority of insurers are currently applying the general rate to riders; only a very small minority of insurers are not. The next issue of the IFSA is:

In addition, under clause 41 (refunds) of the bill, in the case of life insurance, a refund only applies in circumstances where the insured cancels their life policy within 30 days of its issue. This distinction between the cancellation policy provisions for life insurance and riders generally treated as life insurance, such as trauma or TPD (which insurers often sell in concert), is a concern. The discord between cancellation policies is administratively complex, inefficient and serves as a disincentive to many customers considering purchasing both types of insurance together.

The response to that is that the bill was changed to remove this requirement. The next issue raised by the IFSA relates to the proposed commencement date. It states:

The proposed 'commencement' date is stated to be 'on a day to be fixed by proclamation'. From an administrative perspective, relevant IFSA members have indicated that a reasonable implementation period will be required to enable life insurance companies to comply.

My response is that it is intended for the amendments to operate as soon as possible. Given that the riders change is to protect the revenue base and to merely clarify a longstanding revenue office position, it is not intended to provide additional time for insurers to comply. Most insurers have been complying for some time and, should the Supreme Court cases be lost, there may be significant revenue leakage if the amendments are not proclaimed into operation as soon as possible. The other changes made by the bill should not require significant system changes.

Next, the IFSA notes the introduction of an apportionment provision by clause 32(2) of the bill, which provides:

If a provision of this division refers to a premium paid, payable, received, charged or credited in relation to life insurance, or in relation to insurance of another kind, the reference is to be taken to be a reference to the premium to the extent that it was or is paid, payable, received, charged or credited in relation to insurance of the kind referred to in the provision.

It is unclear how the apportionment of the single premium should be determined practically. IFSA suggests a ruling should be issued by RevenueSA in consultation with the IFSA in relation to this apportionment issue.

I respond that RevenueSA adopts the approach expressed in Circular 213 that, where a life policy is issued with riders of a general nature attached and a separate premium component in respect of the rider can be decided with certainty, stamp duty is payable at the general rate on that proportion of the premium attributable to the rider benefit. The majority of insurance companies have been complying with this requirement and are able to separate the premium component for life insurance and the premium paid for riders.

Next, the IFSA states that the bill has unclear and differing provisions in relation to what is the required nexus to the state of South Australia. I respond by saying that the nexus provisions reflect what has been the longstanding position and what has been proven to be effective. Next, the IFSA states that clause 33(1) provides:

An insurer who carries on insurance business in the state must be registered under this division.

The definition of 'insurance business' refers to the 'provision' of insurance, (paragraphs (a) and (b)). Therefore, an insurer who provides insurance in the state is required to be registered. Does 'provision' refer to the location of the insurer who is providing the insurance or does it refer to the insured or the insured's risk?

I respond: in the context of the act, the registration provisions relate to the location of the insurer (or its agents). South Australian risks insured with persons who do not carry on business in the state are dealt with under section 38. These provisions are consistent with the current provisions and are well understood within the industry.

Next, IFSA has suggested an approach which is similar to that which is used in New South Wales. The relevant nexus for life insurance would be:

...of a person whose principal place of residence is, or persons whose principal places or residences are, in South Australia at the time of the policy that affected the insurance is issued.

I respond: life insurance duty is only payable in relation to those persons whose principal place of residence is in South Australia—section 35(5)(b). Next, IFSA states the relevant nexus for general insurance would be:

...property in South Australia or, a risk, contingency or agent concerning an act or omission that, in the normal course of events, may occur within, or partly within, South Australia, or, both.

I respond: general insurance is only payable in relation to insurance risks inside the state other than that in relation to personal accident which depends on the principal place of residence of the insured being in the state. The next nexus that IFSA raises is:

...as currently drafted, the bill would seem to require the inclusion of premiums that are exempt from duty in the Statement, as there appears to be nothing to so exclude them.

My response is that that is correct and that has always been the case. Finally:

Refunds—we note that the term 'dutiable premium' is not defined in the Bill.

My response to that is the term 'dutiable premium' is no longer used in the bill.

Bill read a second time.

Third Reading

The Hon. J.J. SNELLING (Playford—Treasurer, Minister for Employment, Training and Further Education) (16:32): I move:

That this bill be now read a third time.

Bill read a third time and passed.