NZ Consumers Institute Calls For Tax Breaks On Insurance Premiums

by Mary Swire, Tax-News.com, Hong Kong

04 December 2001

According to a report issued by the Consumers Institute of New Zealand, the government should consider the introduction of tax breaks on medical insurance in order to compensate New Zealanders for the rising cost of premiums.

Citing the example of Australia, where customers can claim back around 30% on the cost of insurance premiums, the Institute's Chief Executive, David Russell, argued that there was a strong case for offering tax breaks, as with the country's health system in an increasingly poor state, those New Zealanders who opt for private health insurance are in effect subsidising those who are reliant solely on the public system.

The report revealed that the national health system is seen by New Zealand consumers as good for the treatment of acute illnesses such as heart attacks, and for cancer treatment, but that for many other conditions, such as elective surgery, customers are increasingly choosing to go private.

Earlier this year, the health insurance industry body, the Health Funds Association made a similar plea to the government, which although not totally ignored, did not provoke the hoped-for debate. In the light of the Consumers Association report, Andrea Pettett, the Executive Director of the HFA renewed her calls for a serious discussion on the issue:

'By bringing in a tax incentive, it would make medical insurance more affordable for New Zealanders,' she explained to the country's media at the weekend. 'When people opt for medical insurance they are freeing up resources in the public health system and that means other New Zealanders can get treatment more quickly,' she added.

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