Reforms to the Emergency Services Levy

Reforms to the Emergency Service Levy in NSW will see a reduction in insurance premiums.

The NSW Emergency Services Levy (ESL) is a vital source of funding for essential emergency services agencies in the state, including the Rural Fire Services (RFS), Fire and Rescue New South Wales (FRNSW), and the State Emergency Service (SES). However, collecting ESL from insurance companies has long been a contentious issue due to its impact on insurance premiums.

NSW is the only mainland state still relying on an insurance tax to fund its emergency services. The ESL rates in insurance premiums range from 13% to 16% for residential strata and 22% to 30% for commercial strata.

State taxes on insurance in NSW are nearly three times higher than in Victoria. This significant discrepancy is a crucial factor contributing to an estimated 13% of households in NSW being uninsured, double the rate in Victoria. Lower levels of insurance weakens NSW’s capacity to recover from extreme weather events and increase the burden on recovery services and government relief.

More and more people are being priced out of insurance. In the current year, the Actuaries Institute reported a staggering average increase of over 50% in insurance costs for individuals residing in high-risk areas. The findings also revealed that approximately 250,000 people faced ‘insurance stress,’ where insurance expenses surpassed the equivalent of four weeks’ rent.

Advocacy groups such as the Insurance Council Australia and Strata Community Australia have long championed abolishing the ESL, proposing alternative funding models for emergency services.

In a welcomed move, on November 16, Premier Chris Minns’ announced the reform of the ESL addresses this issue. The decision to abolish the ESL on insurance is expected to substantially reduce costs, with home insurance potentially decreasing by up to 15% and business insurance by around 23%.

The move aligns with successful actions taken by other mainland states that have removed similar levies. Tasmania is reforming its levy, focusing solely on commercial insurance.

Reforming the ESL will be a major win for insurance affordability in New South Wales.

Strata Plus will keep clients informed of the impact these reforms may have on your insurance premiums and consequently strata levies, once the reforms come into play.


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