Tips for a fire levy that's fair Victoria's recent overhaul of its fire services levy should prove instructive for NSW. In short, our southern peers managed to cruel an exercise in sound tax reform. Victoria failed on three counts: they didn't truly broaden the base of contributors, they added taxes to low-risk property, and they used capital-improved value as the base. It was a stunning (and needless) trifecta of poor public policy. The case for reform is solid. At present, the pool of contributors is limited to those who elect to insure property and then pay a tax on their premiums. The NSW government is looking to shift the point of payment away from insurance premiums to a broad-based property tax. A good model should follow sound principles of tax reform. One point where NSW has advantage over Victoria is the valuation base, as the government here made clear there would be no move to capital-improved valuations. Also, NSW Treasurer Mike Baird was right to say last year that "it is a fair thing to ask everyone in the state to contribute ... not just those that take out insurance." That means all property should be captured - real and immobile. Motor vehicles account for about 17 per cent of call-out costs. This should be reflected in the design and allocation of costs under the new system. Our model suggests the annual fee charged per motor vehicle in NSW could be as low as $26 (50¢ a week). Exclusion of motor vehicles would shift a burden as high as $150 million onto real property. The next challenge is to design a system that is fair to low-risk properties. The owners of investment-grade assets already insure their properties, contribute to the current scheme and manage their asset well by investing in fire mitigation and suppression systems. In short, they do the right thing. So the Victorian reforms - which more than doubled taxes on some assets - were unpalatable. NSW can do better. A fixed fee on all properties is ideal. Adjustments can be made to reflect incident rates - matched with a cap that prevents the weight of taxation falling unfairly on investment-grade assets. The NSW government has a strong record on recognising the need to create a competitive tax regime. Delivery of a rational fire services levy is an essential step. Glenn Byres is the NSW executive director of the Property Council of Australia.