A New South Wales parliamentary committee is continuing to examine how the state pays for its emergency services and replacement options for the much criticised Emergency Services Levy (ESL). Wednesday's hearing included appearances from emergency services leaders and the Net Zero Commission. The Legislative Assembly's Select Committee on Emergency Services Funding Reform is due to report by November 18, four months before the March 2027 state election.
On Tuesday, the insurance industry, represented by the ICA, NIBA, Suncorp and IAG put its case to the MPs. Brokers play a central role in the calculation and collection of the ESL. In its submission to the inquiry, NIBA described its members as the ones who calculate and collect the levy on the policies they place and who reconcile and refund it when policies change.
That position carries a cost. NIBA's submission stated that members report absorbing six-figure adjustments from consolidated revenue arising from cancellations, broker changes and recalculations - a direct trust-account exposure. As collecting agents, the submission argues, brokers are the parties authorities pursue when collections are later challenged.
NIBA wants that recognised in any reform framework. It has asked the committee to ensure brokers are not blamed for transition-period pricing decisions outside their control and to empower the Independent Pricing and Regulatory Tribunal (IPART) Insurance Monitor to police over-collection at system level rather than leaving individual client-facing brokers to manage it.
Insurance Business asked Richard Klipin, chief executive officer of NIBA in Sydney, whether the state government looks any closer to acting given that the first NSW consultation on replacing the levy was more than 14 years ago in July 2012.
"Look, it's important to be at the table," said Klipin. "It was important to put our view forward. We acknowledge the work of the NSW Government and across the NSW Parliament around their commitment to seek change and to find other options - and that's an authentic process."
A good case for going is the industry's ongoing efforts to tackle the affordability loop.
"When you mix ESL collection into insurance premiums, you inflate the prices, which impacts affordability, which actually impacts the take-up of insurance," he said. "And whilst everyone wants the firies to turn up when things go wrong, not everyone's paying for it."
He did not overstate the odds of getting a new ESL in place.
"You're right, we've got close before and it didn't go ahead but we're hopeful that through the balance of this term and into the new term the commitment across the House will hold," said Klipin. "And that there's a better way to collect the levy and to basically come into line with the rest of the country."
NIBA's submission, citing NSW Treasury's options paper of April 2026, states the ESL adds about 18% to residential premiums and about 34% to non-residential premiums, with stamp duty and the goods and services tax applying on top of the inflated base. Separate modelling by Lateral Economics, commissioned by the ICA and released in June 2026, put the benefit of a broad-based property charge at up to $460 million in annual welfare gains, with 82,000 additional households taking out building insurance and 320,000 taking out contents cover.
Getting close before is a relevant precedent and it is the reason the transition mechanics matter as much as the principle.
The Berejiklian government legislated a property-based Fire and Emergency Services Levy to commence on 1 July 2017, then deferred it on 30 May 2017 after concluding that some fully insured businesses faced unintended consequences and that its modelling was wrong. Insurers and brokers had been preparing for the switch for a year.
Read next: ICA calls for Emergency Services Levy reform
A NSW Legislative Council committee examined what happened. Tabling its report on November 30 2018, committee chair Robert Borsak said the failed implementation was a poor public policy decision taken without adequate understanding of the complexities involved and that the late deferral caused significant and avoidable costs to local government and the insurance industry.
That is the outcome NIBA's recommendations are built to prevent. Its submission asks for a definite cessation date, or a clearly signposted phased step-down, set far enough ahead for insurers and brokers to update systems, reprice policies and inform clients. It warns that a poorly signposted change invites gaming, with policies cancelled and rewritten around the cut-off, and customer confusion that brokers handle directly.
On refunds, NIBA argues the infrastructure already exists and the instruction is what is missing. Members confirmed that back-office and broking platforms record ESL at individual-policy level in dedicated levy fields. NIBA's recommendation is a simple rule from the authority - refund all ESL collected from a stated date, with brokers calculating per policy - rather than a lump sum handed to brokers to divide among clients, which it describes as impractical.
What has changed since 2017 is the breadth of the coalition pushing for reform. Last month, NIBA joined the ICA, the Strata Community Association NSW, the Financial Rights Legal Centre, the NSW Council of Social Service and the Committee for Sydney in calling on every party in the parliament to commit to replacing the levy in the next term. Andrew Hall, chief executive officer of the ICA in Sydney, put it bluntly in that release: "New South Wales has been debating this for long enough. Scrap the insurance tax – why are we waiting?"
The Chris Minns (pictured) Labor Government committed to reform in 2023 and has released five possible alternatives to the ESL. NIBA has held the same position since 2009: the insurance-based levy penalises those who buy cover and NSW should be brought into line with the other mainland states and territories, which fund emergency services through either a property levy or consolidated revenue. Klipin has also argued, in his recent column on affordability and accessibility as regulatory outcomes, that complexity is one cost driver the state can control directly.
