Mr Kroon, the owner of the Empire Cinema and commercial properties, already pays around $16,000 a year for public liability insurance, travel insurance, commercial insurance and property and contents insurance.

At the current 5 per cent rate of stamp duty, Mr Kroon pays around $800 a year in State Government tax.

With the increase to 9 per cent announced in last week's State Budget, Mr Kroon's tax will increase to $1440 a year.

Member for Southern Highlands Peta Seaton this week highlighted Mr Kroon's case as an example of the effect of the stamp duty increase on businesses, farmers and families.

Ms Seaton said the tax increase would add another $50 to the cost of a typical insurance policy.

It will apply to insurance stamp duties on some commercial insurances, public liability, mortgage insurance, travel insurance and home insurance.

"This is a direct hit on the people who do the right thing, take the risk and invest in jobs and industry, and insure their homes and businesses," she said.

Mr Seaton said it was possible many businesses would be forced to take the risk and give up some discretionary insurance, rather than fork out even more on the tax hike.

"This Budget cements NSW as the highest taxing state to live in and do business and the hike in insurance stamp duties is another reason to push investment to rival states," said Ms Seaton.