In what is welcome news for businesses and households across NSW, the state government has begun talks to reform the Emergency Services Levy (ESL).
Currently, the ESL is an additional tax charged by the government to help fund costs in response to fires, bushfires, storms, floods, transport accidents and other emergencies. New South Wales as it stands, is the only mainland state that applies the ESL to property insurance premiums, increasing such premiums by an average rate of 30 per cent for businesses and 18 per cent for households. As per a report conducted by the Insurance Council of Australia and according to a recent article by the Financial Review, this accounts for $1.6 billion worth of funding a year. Hence the previous reluctance and difficulty in engaging any type of reform.
However, given the surmounting pressures being felt within the industry, the widening protection gap and the general insurance affordability crises – it is encouraging that this issue is finally receiving the attention it deserves.
Treasurer Daniel Mookhey when commenting on the matter, said that “Far too many home owners run the risk of leaving their biggest asset uninsured because of soaring costs. Reforming the Emergency Services Levy is one lever we can pull to help ease that burden,” he said.“The NSW government will begin consultation across industry and the wider community. It’s not a reform that can be rushed – it’s too important to get it right.”
The state government has an opportunity to alleviate this burden on NSW businesses and households in an already highly pressurised economy. An alternative model is possible, as we have seen in other states, and we hope this announcement is a positive sign that we may be finally heading in the right direction.
