The National Insurance Brokers Association has renewed its call for reform of New South Wales’ emergency services levy as the state moves into the next stage of its review of the long-contested funding mechanism.
In a fresh submission responding to the NSW government’s proposed next steps, NIBA welcomed the establishment of a parliamentary inquiry into replacement funding options, describing the process as a key opportunity to address what it says is an inequitable system that continues to inflate insurance premiums.
The broker body has long argued that the current emergency services levy unfairly places the cost of funding fire and emergency services on insured households and businesses by embedding the charge in insurance premiums.
According to NIBA, that approach effectively penalises those who purchase cover while creating affordability pressures that can discourage adequate insurance uptake - an issue of growing concern as premium costs rise across multiple property lines.
“The current system continues to add pressure to premiums at a time when affordability is already under strain,” NIBA said in its response to government.
The latest development follows confirmation of the membership of the NSW Legislative Assembly’s Select Committee on Emergency Services Funding Reform, which will now examine alternatives to the existing levy framework. Independent MP Jacqui Scruby will chair the committee, which is due to report by November 18, 2026.
While the inquiry itself has already been announced, NIBA’s latest intervention signals the broker sector’s intention to maintain pressure on government as reform discussions progress.
Emergency services levy reform has been a longstanding issue for brokers and insurers in Australia, particularly in New South Wales, where the levy has historically been criticised for distorting insurance pricing and reducing take-up rates compared with tax-based alternatives used in other jurisdictions.
Industry groups have argued for years that moving levy funding away from insurance premiums could improve affordability, reduce underinsurance and broaden the funding base more equitably.
The parliamentary committee will assess replacement options against criteria including equity, simplicity, efficiency, sustainability and cost recovery, while also considering transition arrangements and concession structures.
For brokers, the outcome could have material implications for client affordability and market penetration, particularly in property classes where premium sensitivity remains high.
NIBA said it will continue advocating throughout the review process for a replacement model that improves insurance accessibility and creates a fairer funding structure for NSW communities.
