ICA calls for Emergency Services Levy reform

Nearly two-thirds of voters support ESL removal, group says

ICA calls for Emergency Services Levy reform

Insurance News

By Roxanne Libatique

The Insurance Council of Australia (ICA) has released policy recommendations ahead of the New South Wales (NSW) government election and has called for reform to the Emergency Services Levy (ESL).

NSW is the only mainland state that still funds emergency services by applying a levy on insurance, adding around 18% to home insurance premiums and up to 40% to business cover. Currently, ESL NSW insurance customers are paying nearly thrice the amount of state taxes than Victorian insurance customers, according to the ICA.

The ICA's “A Stronger NSW” report suggests removing the ESL from insurance premiums to reduce around 15% in home insurance customers' annual premiums.

Campaign launched to support calls for reforming ESL

A state-wide advertising campaign backed by new research from the ICA has been released to support calls on the next NSW government to “find a fairer way” to fund emergency services and bring NSW in line with other mainland states and territories.

In its report, the ICA noted that nearly two-thirds of NSW voters (65%) support removing the ESL and replacing it with an alternative funding model for emergency services.

What are the ICA's policy recommendations for the next NSW government?

In addition to calling for ESL reform, the ICA made these further policy recommendations:

  • Prevent the development of new homes in high-risk areas by reviewing land use planning arrangements based on water catchments;
  • Protect homes and communities by investing in measures such as community infrastructure, improved flood early warning systems, and home retrofit programs;
  • Design and construct stronger homes by including the principle of resilience in building standards;
  • Reform written-off vehicle rules for sustainable car insurance and promote second-hand vehicle supply;
  • Accelerate the transition to electric vehicles (EVs) by ensuring homes are EV-ready and addressing skill shortage in EV repair;
  • Review current tort law and civil liability settings to increase insurance affordability and availability for small businesses;
  • Remove unfair insurance requirements from government contracts; and
  • Enable households, communities, government, and agencies to better prepare, protect, and respond to disasters through improved and consistent data standards.

Reducing risk and tackling affordability

ICA CEO Andrew Hall said the recommendations aim to drive action on reducing risk and addressing the critical issue of insurance affordability and availability in NSW.

“The abolition of the emergency services levy is key to this: The next NSW Government must find a fairer way to fund emergency services without having the burden fall directly on insurance policyholders,” he said. “At a time when adequate insurance cover is more important than ever, home insurance customers in NSW are paying the most tax in Australia, and this is leading to lower levels of insurance when compared to other states.

“The NSW emergency services levy weakens our collective capacity to recover from natural disasters and increases the burden on NSW taxpayers for financial relief.

“We encourage whoever wins the NSW election in 40 days' time to urgently take up this and the other eight policy proposals to reduce risk and improve insurance outcomes in the state.”

Aside from releasing recommendations for the NSW government, the ICA continued its push for the Victorian government to prepare rather than repair communities hit by natural disasters. It also met with ministers to discuss worsening extreme weather events driving up insurance costs.


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