Brokers will present their case at a formal hearing on the New South Wales Emergency Services Levy (ESL) today. The National Insurance Brokers Association (NIBA) is appearing before a NSW parliamentary committee alongside the Insurance Council of Australia (ICA), Suncorp and Insurance Australia Group (IAG) as public hearings into replacing the levy begin in Sydney.
"Most people have no idea this tax exists, because it is a state government charge that gets bundled into your premium rather than sent out as a bill with its own name on it," said Andrew Hall (pictured), the ICA's CEO in a statement released this morning.
The ICA said it will tell the Legislative Assembly's Select Committee on Emergency Services Funding Reform that the levy adds around 18% to the average home insurance premium and about 34% to business premiums, and that it costs the state economy roughly half a billion dollars a year on top of the revenue it raises.
That commercial loading is the number with the most immediate consequence for brokers. The ICA put the annual levy bill for a suburban mechanic at around $12,000 and for a family restaurant at around $9,300 - amounts that sit inside the premium a broker presents at renewal without appearing as a separately named charge.
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Independent modelling by Lateral Economics, commissioned by the ICA, found most households would be better off under a property-based levy even after paying the replacement charge, with the average household ahead by around $55 a year. The same modelling estimated that shifting the levy onto property would cut the economic damage caused by the current system by almost 80% and deliver annual benefits to the NSW economy of between $317 million and $460 million.
The ICA also said more than 1.1 million NSW households hold no contents insurance and that removing the levy would bring an estimated 320,000 households into cover. Brokers following the five replacement levy models set out in the NSW Treasury options paper will recognise the tension in those figures. The ESL is charged as a percentage of the premium; every replacement model is a fixed charge tied to land value. Switching between the two does not move all clients in the same direction. Treasury's modelling projects an average annual saving of about $65 for the residential sector, but higher average charges for commercial and industrial property owners – a client whose land is valuable but whose premium is modest can end up worse off overall.
NSW is the only mainland jurisdiction still funding fire and emergency services primarily through a levy on insurance premiums. Revenue NSW has gazetted the insurer contribution target at $1,511,742,400 for 2026-27.
The committee, chaired by independent MP Jacqui Scruby, member for Pittwater, is due to report by 18 November 2026 - months out from the March 2027 state election. Insurance Business has previously reported on the premium gap between NSW and Victorian home and contents policyholders and on NIBA's earlier submissions to the parliamentary review process.
"This is a question the rest of the country worked out years ago, and there is nothing unique about New South Wales that makes fire trucks harder to fund here than they are in Queensland or Victoria or South Australia," said Hall.
