NSW brokers are placing home and contents policies at an average of $4,815 – compared to $3,037 in Victoria, according to CHOICE data collected in April 2026. That $1,778 gap is not entirely explained by risk. A portion of it is a policy choice, and the window to address it is narrowing fast.
A coalition of six business, consumer, and industry groups moved on August 4, 2026, to press every party in the NSW Parliament for a binding commitment to eliminate the state’s Emergency Services Levy (ESL) before the March 2027 election. The groups – the Insurance Council of Australia (ICA), Strata Community Association NSW, Financial Rights Legal Centre, NSW Council of Social Service, Committee for Sydney, and the National Insurance Brokers Association (NIBA) – are calling for a firm, bipartisan commitment backed by an implementation timetable and protections for vulnerable groups.
The campaign arrives at a precise moment in the reform process. The NSW Legislative Assembly’s Select Committee on Emergency Services Funding Reform, chaired by Independent MP Jacqui Scruby, is due to report by November 18, 2026, per the Parliament of NSW. The committee’s findings are expected to influence the next phase of debate over whether NSW will move away from its insurance-based funding model ahead of the March 2027 state election.
All mainland states, apart from NSW, have implemented property-based levies to fund their emergency services. Victoria made the shift in July 2013, following a recommendation of the Victorian Bushfires Royal Commission. More than a decade later, the premium differential between the two states – $1,778 on average home and contents cover – is among the measurable structural consequences of NSW maintaining an insurance-based model while others have not.
The ESL currently adds approximately 18% to home insurance premiums and around 34% to business insurance premiums. The levy is forecast to draw $1.5 billion from NSW households and businesses in 2026-27 alone – a 66% increase over five years – with insurance taxes including stamp duty projected to exceed $3 billion a year across the forward estimates, according to the ICA citing the 2026-27 NSW Budget. That loading comes on top of broader premium increases across the insurance market. Home and contents insurance quotes across Australia’s five largest capital cities rose by an average of $373.93, or 14.78%, in the 12 months to June 2026, according to Compare the Market. For NSW policyholders, the ESL represents an additional cost component alongside broader market factors influencing premiums.
The NSW Treasury options paper presents five models for replacing the ESL, each built on tiered fixed charges applied to property land values, spanning residential, commercial, industrial, farm, and public benefit categories. The five options vary in the number of tiers and the steepness of escalation – ranging from a straightforward four-tier model to a six-tier structure with greater escalation – but share the same design logic: shifting the funding obligation away from insurance premiums and onto all property owners.
The $65 average annual saving for insured residential properties is the number brokers will encounter most often in client conversations. Under all five levy model options, the average replacement levy for the residential sector is expected to be $65 lower than the average ESL burden for insured property, according to NSW Treasury’s modelling based on 2023-24 data. Owners of properties outside Greater Sydney are around twice as likely to pay less under the replacement levy than their metropolitan counterparts, given the combination of generally lower land values and higher ESL costs driven by greater exposure to flood and bushfire risk.
For commercial and industrial clients, the modelling is less favourable. Commercial and industrial property owners are projected to face higher average charges under a replacement levy. Brokers managing those books will need to communicate that trade-off clearly at renewal. NSW Treasury estimates that replacing the ESL with a more efficient property levy would add around $1.8 billion to the NSW economy over time, equivalent to increasing annual household incomes by around $300 on average.
NIBA CEO Richard Klipin said the levy’s daily impact on broker clients is direct. “The ESL adds hundreds of dollars to the cost of protection for many households and small businesses already stretched by rising premiums in NSW,” Klipin said.
The structural effect on take-up rates compounds the commercial problem. Independent modelling by Lateral Economics, commissioned by the ICA and released July 7, 2026, projects that removing the levy would bring an additional 82,000 households into building cover and 320,000 into contents cover. IAG, in a submission to the Select Committee, cited May 2026 polling by YouGov in which just 7% of NSW respondents said a tax on insurance is the best way to fund emergency services.
For brokers with strata books, the levy’s effect is compounded by mandatory insurance obligations. Owners corporations are required to hold compulsory building insurance, making the ESL unavoidable and cumulative across managed portfolios. Strata Community Association NSW president Robert Anderson framed the interstate disparity plainly. “Strata owners in NSW have been paying up to three times more in Emergency Services Levy charges than their Victorian counterparts, despite facing similar insurance needs,” Anderson said.
Momentum is not guaranteed. NSW deferred an almost identical property-based levy indefinitely in May 2017. The Minns Labor Government committed to reform in 2023 and has worked through extensive data collection, with NSW Treasurer Daniel Mookhey describing the options paper as an “important step in moving funding for emergency services to an equitable and sustainable footing that cuts the cost of insurance.” The government has not, however, identified a preferred model among the five options.
The November 18 committee report will determine whether parties formulate concrete pre-election commitments – including implementation timetables – or whether reform stalls again. ICA CEO Andrew Hall framed the window plainly. “More than two million households could be better off under a fairer system – every party now has the opportunity to commit to reform before the election,” Hall said. Financial Rights Legal Centre principal Julia Davis anchored the issue in the broader affordability context. “Only in NSW is this insurance affordability problem compounded by an emergency services levy adding 18% on top,” Davis said, citing actuarial research estimating that more than 1.6 million homes nationally already face insurance affordability pressure.
