The Insurance Council of Australia (ICA) has welcomed the disaster resilience funding in the 2023-24 New South Wales (NSW) State Budget.
In a statement, the ICA said the budget for initiatives to reduce risk and improve disaster resilience was crucial, including the new $150 million Community Restoration Flood Fund to support disaster-impacted communities in the Northern Rivers and Central West and funding for timely and accurate hazard warnings, early warning systems for fires and floods, bushfire season hazard reduction teams, restoration of roads and delivery of housing in disaster-impacted areas, and deployable internet and mobile phone coverage during and after disasters.
“Last year’s flood emergency taught New South Wales a hard lesson about disaster preparedness, and funding in [the] budget for risk reduction and disaster recovery is welcome,” said ICA acting CEO Kylie Macfarlane.
The ICA emphasised the need to reform insurance taxes and decrease insurance costs in future budgets.
NSW has the highest rate of insurance taxes in Australia. With the Emergency Services Levy (ESL) and stamp duty, insurance customers pay 20% to 40% in state taxes on top of their premiums.
The NSW budget noted that the government expects to collect $11.9 billion from insurance customers, over $5.1 billion through the ESL, and $6.8 billion through stamp duty, around $1 in every $15 of all forecast tax revenue over the next four years.
“The best way to improve disaster resilience is to improve insurance coverage, and [the] budget is a missed opportunity to progress much needed reform of insurance taxes in New South Wales,” Macfarlane said. “While the focus on new housing is welcome, it is incumbent on all governments to take practical steps to end development on floodplains to keep people out of harm’s way.”
The ICA recently announced that some of its representatives will join global insurance leaders to discuss how extreme climate issues impact the Australian insurance market.