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State Taxes Drive Up Insurance Costs for Australian Small Businesses

State Taxes Drive Up Insurance Costs for Australian Small Businesses

A recent report by the Australian Chamber of Commerce and Industry (ACCI) has highlighted a concerning trend: small businesses across Australia are facing insurance premium increases of up to 30% due to taxes and levies imposed by state and territory governments.
This financial burden is prompting a growing number of small businesses to either underinsure or forgo insurance coverage altogether, exposing them to significant risks.

The report, titled 'Addressing the Small Business Insurance Challenge,' underscores the challenges small business owners face in managing rising operational costs, including energy and labor expenses, alongside escalating insurance premiums. ACCI CEO Andrew McKellar emphasizes the need for small business owners to explore strategies to insure their businesses and assets effectively while mitigating risks and reducing insurance burdens.

For small to medium business owners, understanding the components of their insurance premiums is crucial. State-imposed taxes and levies can significantly inflate costs, making it essential to assess and compare policies carefully. Engaging with insurance brokers or advisors can provide valuable insights into navigating these challenges and identifying cost-effective coverage options.

Additionally, implementing robust risk management practices can not only reduce the likelihood of claims but also potentially lower premium costs. Regularly reviewing insurance needs and staying informed about policy changes and available discounts can further aid in managing expenses.

In light of these findings, small business owners are encouraged to advocate for policy reforms that address the disproportionate impact of state taxes on insurance premiums. Collaborating with industry associations and participating in discussions can help drive changes that support the sustainability and growth of small businesses in Australia.

Published:Saturday, 8th Nov 2025
Source: Paige Estritori

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Whole Life Insurance:
A type of life insurance that provides coverage for the insured's entire lifetime, with a savings component that builds cash value.