NSW to ditch current insurance-funded Emergency Services Levy
The NSW Labor Government says the state’s insurance-funded Emergency Services Levy (ESL) is inefficient and unsustainable and it plans to ditch current arrangements and introduce a fairer system.
“Reforming the Emergency Services levy is not easy, but it’s the right thing to do,” Premier Chris Minns said this morning.
“For too long this has been in the too hard basket for NSW. But as we face the threat of more natural disasters, we have a significant opportunity to make the system fairer, more sustainable for the future.”
NSW is the only mainland state that uses a levy on insurance to fund emergency services, and under the existing model policyholders contribute 73.7%, local councils 11.7% and the state government 14.6%.
The proposed reforms will be revenue neutral and will not be the same as a model previously proposed by the former Coalition Government, a statement today says.
The NSW Berejiklian Government backflipped in June 2017 on plans to ditch the levy after a business backlash to their alternative proposals.
The Government today says the Treasurer will lead consultations with industry and stakeholders on the new reforms, including issuing a discussion paper in coming months.
The Insurance Council of Australia (ICA), which has long campaigned for an end to the levy, has congratulated the Government for its decision to reform the ESL.
State Budget papers estimate that insurance customers will pay $1.3 billion through the ESL this year and, without reform, would pay more than $5.1 billion over the forward estimates, it says.
“Reforming the ESL will be a major win for insurance affordability in NSW, an issue that is being discussed around kitchen tables and in small businesses around the state,” CEO Andrew Hall said.