The NSW government has established a framework for replacing the emergency services levy with an alternative based on land values but does not have a preferred model among five options, a discussion paper says.

The framework considers feedback, tax modelling, previous reform efforts and emergency services funding in other states and territories, and all options aim to make the replacement levy simpler and more equitable than the current insurance-based system, the paper says.

A NSW parliamentary inquiry into emergency services funding reform has released the discussion paper and called for submissions by June 19.

The options involve tiered fixed charges based on land values across residential, commercial, industrial, farm, public benefit and government categories. Concessions would be provided to pensions and consideration given to hardship provisions.

Across all sectors, owners of properties with lower land values would be more likely to pay less under the replacement levy than under the ESL, compared with owners of higher-value properties.

The framework sets a floor, or minimum contribution, and a ceiling, limiting the variation in contributions within each property sector, but the paper says: “Some changes in levy burden are unavoidable under a more community-based system that balances equity and simplicity.”

Inquiry committee chair Jacqui Scruby says the aim is to make sure changes to the model are fair, simple, efficient and sustainable.

“The committee wants to hear from stakeholders to ensure their perspectives are meaningfully considered as part of this process,” she said.

Issues for consideration also include the transition period for any change to a new funding model.

The discussion paper says the ESL’s impact on decisions to underinsure makes it one of the most economically damaging taxes in NSW.

“It is estimated that, over time, replacing the ESL with a more efficient property levy would add around $1.8 billion to the NSW economy, in today’s terms, or the equivalent to increasing annual household incomes by around $300 on average,” it says.

The options paper is available here.