Federal Assistant Treasurer backs NSW ESL reform
Federal Assistant Treasurer and Financial Services Minister Stephen Jones says the NSW Government’s plan to remove the Emergency Services Levy (ESL) from insurance policies is a long overdue reform.
Mr Jones says the ESL accounts for about 18% of the cost of insurance for households in NSW and about 30% for businesses, making affordability issues particularly acute in a state that has experienced several severe floods in recent years.
“The removal of the ESL from insurance policies is an excellent decision and a long overdue reform. It will come as a huge relief for households and businesses in NSW feeling the crunch of cost-of-living pressures,” he said.
Mr Jones says floods and fires driven by extreme weather are hitting harder and more often.
“We want people to be able to protect their assets when the worst strikes, but high insurance costs mean more and more people simply can’t afford it,” he said.
Premier Chris Minns announced last week that the Government would remove the ESL from insurance and apply it instead to property, with Treasurer Daniel Mookhey to lead a consultation with industry and stakeholders on the proposed model.
An insurance monitor will be appointed when the changes are introduced to make sure premium levels reflect the reforms.
The Insurance Council of Australia (ICA) and National Insurance Brokers Association, which have both long pushed for an end to the ESL, are among groups that have welcomed the change.
“The ESL is a poorly designed and inefficient tax that numerous previous inquiries have said should be abolished and we congratulate Premier Minns, Treasurer Mookhey, and Emergency Services Minister [Jihad] Dib for their announcement,” ICA CEO Andrew Hall said.
The NSW Berejiklian Government backflipped in June 2017 on plans to ditch the levy, shortly before proposed reforms were due to take effect, after a backlash to their proposals by some businesses and other property owners who faced increased costs.
“We’ll learn the mistakes of the previous government’s attempts at this reform and ensure that we are investigating all potential methods of measuring the value of a property not just the unimproved value of the land,” Mr Minns said last week.