Submissions to the NSW parliamentary inquiry into emergency services funding reform have illustrated the complexities and challenges around removing the long-hated tax on insurance.

The Northern Rivers Joint Organisation, for instance, backs transition to a broader, more equitable model that improves insurance affordability and community resilience, but it is not sold on options featured in a Treasury discussion paper.

The group – which includes the Ballina, Byron, Clarence Valley, Kyogle, Lismore, Richmond Valley and Tweed councils – says commercial property owners would still end up paying more than counterparts in Queensland and Victoria.

“NSW Treasury’s own modelling acknowledges that commercial and industrial property owners are projected to face higher average charges under all five replacement levy options compared to the current ESL,” it says. “This is a fundamental design problem.”

Business NSW agrees it is time to move on from the emergency funding status quo, while challenging Treasury’s “implicit” assumption that businesses can handle substantial additional costs.

“The end result is that, no matter which of the five options are considered, businesses would bear a far greater share of the total cost of emergency services funding than they do now,” it says.

“Specifically, the choice to ensure a revenue-neutral model by increasing businesses’ total contribution from 28.6% to 43.3% is unworkable in the prevailing economic climate.”

It estimates, using options paper data, this would have added up to $180 million to the tax burden on businesses – $900 per business property – in 2023-24 relative to the insurance-based levy.

The Real Estate Institute of NSW worries the government has “too readily” accepted the premise that land values are broadly reflective of property owners’ capacity to pay, affecting asset-rich and cash-poor owners, retirees and commercial and industrial property owners.

The Property Council of Australia says it does not support any of the proposals, but sees the six-tier option C as the least bad if it can be further amended.

Local Government NSW says a new property-based levy should be collected by Revenue NSW rather than councils, and it urges removal of the 11.7% emergency services levy funded by council contributions.

Several submissions suggest motor vehicle ownership could be included as part of the revenue base, and some favour separating out mining properties from the industrial sector.

The Shopping Centre Council of Australia is particularly critical and describes risk considerations in the paper as “a lazy approach to public policy and taxation design”.

“The options paper has failed to present the committee with any options that are based on consistent logic,” it says. “To proceed with any reform based on the options paper would be a reckless public policy decision that establishes a flawed, inequitable and unsustainable levy.”

Sydney Knitting Nannas backs tweaking the models to include a levy on fossil fuel export companies, which would be collected by Treasury and redistributed to emergency services and local councils to fund the rising costs of climate change.

The Insurance Council of Australia has backed its submission with independent research supporting change, while proposing further improvements to suggested models.

It says option C could be augmented with additional tiers and refinements to improve its operation, while issues around the transition also need to be carefully considered.

“Whatever new model is adopted will change where funds are collected and the amount individual taxpayers pay,” it says. “This represents a significant upheaval to the current complex, opaque and generally not well-known system.”

The government, in consultation with the industry, should undertake a high visibility communication campaign ahead of any changes, it says.

NSW Treasurer Daniel Mookhey told the ICA annual dinner last month that funding emergency services through an insurance tax punishes the prudent and drives up premiums, and “every serious person who has looked at it, for two decades, has reached that conclusion.”

Many reforms, whether in insurance or elsewhere, have derailed because agreement on the way forward proved elusive even when change was supported, but Mr Mookhey has indicated the government is up for the challenge.

“I won’t pretend the last stretch is the easy part,” he said. “Reform like this only works if it’s built to outlast the government that builds it. That means bipartisanship, and bipartisanship takes time, so we’re taking the time to get it right.”

The Legislative Assembly Select Committee on Emergency Services Funding Reform, which has published 87 submissions on the Treasury options paper, has its work cut out as part of that broader political process.

The submissions are here.